August 14, 2008

To: All Employees of the Desert Sun

From: Rich Ramhoff

Re: Company expense reductions

I’m writing to let all of you know about some coming expense reductions that will affect The Desert Sun and Gannett’s entire U.S. Community Publishing Division. The extent of these reductions is such that you may be hearing from other colleagues across the division, and I wanted to make sure you had accurate information.

As you know from reading our headlines, the real estate economy in California and across the U.S. is in a significant downturn. Gas prices are up; vehicle sales are down. Unemployment is on the rise. Those three sectors – real estate, auto and recruitment – make up a very large portion of our business. That has severely hurt our revenues in Palm Springs and the division as a whole.

To respond to the decline, Community Publishing has given every newspaper a significant payroll reduction target. In total for the division, it will amount to about 1,000 positions, of which 600 will be actual layoffs across Gannett. In Palm Springs, we have been able to make up almost all of our reduction through attrition and holding positions open. However, we will have to eliminate three current full-time positions. I realize that announcing layoffs before we have a final decision about the actual people involved is difficult. Division is reviewing all newspaper plans, and will provide final approval before Aug. 21. Each person will receive one week of pay for every year of service (minimum two weeks) and medical benefits will continue during that time.

I regret that I have to send this information while I am away from the office. I am moving my family to the valley this weekend. I will be back in the office Monday afternoon and will be available to answer questions then. Until I get back, please talk with your department heads if you have any questions.

These are tough times, but let me emphasize a point: We are going to remain the strongest local information source in the Coachella Valley. That means we still will hire people to cover news, sell advertising and support the people who do that. It also means we may need to decide to stop doing less important things in order to do the most important things. We will rebound as the Valley economy rebounds. With our strong newspaper, our Web site and our non-daily publications we reach more than three-quarters of the adults in our market over the course of a week. That is a business with a future. Don’t believe anyone who tells you otherwise.