As the coronavirus pandemic continues to harm the economy both iHeartMedia and Townsquare Media have implemented measures to cut costs and trim some of their operations.
In a memo to employees, Townsquare CEO Bill Wilson announced that the company has laid off 65 employees including 26 at the corporate level on top of the series of cuts the company made at some of its markets over the past two weeks. It is also suspending its 401K matching program and announced that eighteen executives will take a 10% reduction in their pay.
At iHeartMedia, CEO Bob Pittman and CFO Rich Bressler announced a number of 90 day furloughs of some employees that we have learned include part-time on-air talent, members of promotions and marketing departments and sales assistants. Those furloughed will continue to receive health benefits and can file for state unemployment. Pittman will also voluntarily take no salary for the remainder of the year and has given up his annual incentive bonus, while Bressler and other members of iHeart’s senior management will take between 30% and 70% reductions in pay.
Other companies have made similar moves in the past couple of weeks. Beasley and Adams cut salaries across the board by 10%. Entercom has furloughed and then laid-off many part-timers. Alpha Media made cuts in multiple markets, while Saga has cut two staffers in each cluster. Smaller groups such as Meruelo Media, Mid-West Family Broadcasting and Neuhoff Media have made cuts and/or furloughs of employees.
The memos from both Bob Pittman and Bill Wilson follow:
Our number one concern in this unprecedented time is the safety and well-being of our employees. In response to the coronavirus pandemic, our company continues to be a primarily work-from-home operation and we have also added some coronavirus-related resources and healthcare benefits if you should need to take advantage of them.
Last week we wrote to you about the economic downturn our country is facing as the result of the pandemic and the need to respond to it to preserve the health of our company. During this unsettled time, we also know the biggest economic concern among our employees is understandably about preserving jobs—and we want you to know that it’s our main concern as well.
Although we have had to make hard decisions to address the economic impact of the downturn, our management team has found ways to reduce our company’s expenses without resorting to permanent layoffs.
As the CEO of the company, Bob will voluntarily take no salary for the remainder of the year and has given up his annual incentive bonus, and Rich and our senior management team will take reductions ranging from 30% to over 70% of their total compensation for the remainder of the year.
In addition, we have implemented:
- Reduction of all expenses that can be postponed without impacting our service and commitment to our communities;
- Temporary suspension of the 401(k) match;
- No overtime without pre-approval;
- Temporary suspension of new raises; and
- Strict limitations on – or complete elimination of – Travel and Entertainment (T&E) expenses.
We believe all of these reductions give us more room to protect jobs.
Given our pullback from live events and our shift to a work-from-home model, there are a few jobs that are not essential until our business operations revert back to usual. This week we are taking the difficult step of implementing a 90-day furlough, or temporary unpaid leave of absence, for jobs affected by these changes. To be clear, while this will involve a small total number of employees, they are valued colleagues and we did not take this step lightly. We look forward to welcoming them back as soon as we can.
This is not a layoff or a reduction in force (RIF). With a furlough, while it is an unpaid leave of absence, the affected employees stay in our employ, allowing us to continue offering these employees full health benefits, and we want to make sure we take care of them as best we can during this time. And with state unemployment benefits, supplemented by the added special benefits that are part of the new federal stimulus legislation, hopefully these employees will not feel any significant financial impact during this limited period of time.
We’ve never lived through anything like this and, as managers, we’ve never had to make more difficult decisions. However, please know we are listening, studying and considering all options before we make the important decisions that affect you and the company. We may miss on some of these decisions — and we will pivot when we find better ones — but throughout it all, we truly appreciate your support for us, for your colleagues and for the company.
Please be safe and take care of your health and your families.
Bob and Rich
——-
Team Townsquare,
Each of us personally is facing a difficult situation caused by the worldwide pandemic of the Coronavirus (COVID-19). Working our way through this situation presents numerous challenges that are unprecedented.
As I shared with you in my previous updates, my thoughts and prayers go out to all who have been affected in the U.S and around the world. I trust you know that my #1 priority is the safety, health and well-being of our team members, our families, our partners and our communities. Nothing is more important to me. Safety First.
In spite of the explosive growth of COVID-19 cases, the stay at home orders across most states, and the significant disruption to our clients business, I have been inspired by how the Townsquare team, each of you, has quickly risen to the occasion to help our listeners, our communities and our clients. Truly, I could not be more proud, but I am not surprised as we are Townsquare and that is what we do.
While our employees are putting on a brave and positive face, Townsquare is not unscathed by COVID-19. Fortunately, I am not aware of any Townsquare employee who has tested positive and contracted the virus, but the economic impact on our business has been significant over the past 2 weeks. We have cancelled all live events for the upcoming months, resulting in millions of dollars of lost revenue. In addition, we have experienced and expect to continue to experience a sudden and substantial decline in our advertising business (broadcast and digital). As a result of the pandemic, our revenue will be much lower for a period of time. Thankfully, our Townsquare Interactive solutions have been viewed as very valuable to local businesses at a time when Americans are spending more time at home and online than ever before. So far, we are not experiencing a revenue decline in our Townsquare Interactive business. In fact, on Friday we had a very high number of new TSI sales and over the past week sales have been quite strong. Thank you to each of you who continue to educate existing and new clients of the value and return on investment Townsquare Interactive can be providing local businesses right now. The same value and powerful solutions are true as well with our broadcast and digital advertising solutions. While some clients are pausing their spend given their specific situation (gyms, certain retail, nail and hair salons, etc.) other categories are increasing their spend, or advertising with us for the first time (sanitizing companies, public health departments, restaurants offering dine out options). One of the most important things we can do right now is make sure we are educating the businesses in our markets of the value we can provide in the current environment. While we must first and foremost demonstrate empathy for the challenges these businesses are facing, it has never been more important to superserve our customers and help them not only weather this storm, but prevail.
While Townsquare will clearly prevail, it quickly became clear to me that in order to get through the current situation we’ve had to make some very difficult decisions and sacrifices over the past 10 days, and being transparent, I believe we will have to make future sacrifices as well. The toughest but necessary decision that I have had to make is to say goodbye to some of our employees, and compete to win with a smaller team moving forward. Earlier today we had a reduction in workforce of 65 team members. Those 65 team members included 26 corporate employees with the remaining employees impacted spread out across our 67 local markets. When the first of your five pillars is YOU Matter, it’s hard not to question if this is true when we are terminating employees at such a challenging time. The decision to let these employees go was based on a number of factors, the most important being my belief that reducing our overall workforce was necessary to protect our business and the remaining team moving forward. Thankfully, the government has passed an unprecedented stimulus bill a few days ago that will help Americans with direct deposit of income for those earning under $99,000 as well as help local businesses with no or low interest free loans and other extraordinary measures to assist our economy during this time. I had a video conference call earlier today with our local market leadership, along with TSI leadership, and based on their feedback we are creating resources and materials that our teams around the country can use to educate their local businesses on these government programs which can potentially help their business during these challenging times.
Another sacrifice we are going to have to make is to suspend our company 401K company match effective April 1. If you are a participant in our company’s 401K plan and based on not having a company match starting April 1 want to suspend your contribution, Alyssa will be sending out instructions how to do so today or tomorrow prior to April 1. As you know , starting a 401K company match was something I was very proud of implementing upon becoming CEO and I regret having to suspend it. I look forward to re-implementing the match once we overcome these challenges together.
Over the past week as our Townsquare corporate leadership team worked together to develop a plan for these unprecedented times, along with myself a number of your leaders volunteered to take a 10% reduction in their compensation to assist us in overcoming the economic challenges we are faced with. So along with myself, I wanted to take the opportunity to thank Stu Rosenstein, Erik Hellum, Alyssa Goldberg, Scott Schatz, Claire Yenicay, Chris Kitchen, Cristina Cipolla, Tim Pirrone, Todd Lawley, Rob Williams, Kevin Godwin, Kelly Quinn, Matt Kiger, Kurt Johnson, Jared Willig, Michael Josephs & Jon Reynolds in volunteering for a 10% temporary pay reduction as well. I am humbled and honored to work alongside each of them each day and particularly in this time of great challenges, I appreciate their input and leadership.
Unfortunately, unless things improve significantly and quickly, I believe I will need to make other expense reduction decisions. My goal is to not do another workforce reduction, but rather monitor the economic impact that COVID-19 has on our country and thus our company over the next few months and find other solutions to navigating this storm. That is my goal. To accomplish that goal, I am requesting of each of you, and I need each of you, to rise the challenge we each face. Do the very best you can do at the job you have, even in the face of these challenging circumstances. That is what I am going to do, and I know you will be right there with me.
With a lot of challenges ahead of each of us, it is important to make mention of the good. The good is that with certain sacrifices, we are going to overcome this challenge together. We will continue to lead from the front, continue to inform accurately, provide comfort in a time when our familiar voices have never been more important, and continue to help our clients and communities thrive. #BetterTogether. That I am 100% certain of. Townsquare will prevail. I appreciate your support in these unprecedented times. The key to overcoming the challenge we face is to bond together as we always have as a strong Townsquare Team. Over the past two years, your work has translated to industry leading performance. During this crisis, together as a team we will leverage our bond and do what is best for our listeners, our communities and our clients. We got this. We are Townsquare.
I look forward to talking to you in 30 minutes on our 5 pm Eastern today.
Stay Townsquare Strong. Stay Calm. Stay Safe.
With much appreciation for your work and commitment each and every day, especially now.
Bill
#TownsquareStrong
