Entercom Chairman, Pres. & CEO David Field announced the company moves in a Thursday morning memo:
To: Entercom Team
From: David Field
Date: Thursday, April 2, 2020
Subject: Important Company Update
Thank you for your resilience, dedication and fortitude as we manage through the extraordinarily challenging and disruptive impact of the COVID-19 pandemic. We are all doing our best to ensure that our loved ones remain safe and healthy while working tirelessly to serve our listeners, customers, and communities. I am deeply appreciative of everything you are doing to keep us moving forward under these difficult conditions. We are fortunate to work in an industry that plays such an important role in our country at a time of crisis, providing a critically important and trusted local voice for news and information as well as entertainment, companionship and respite during these uncertain times.
Unfortunately, the severity of the situation necessitates us making significant cost reductions in order to cope with the realities at hand. Our nation is facing unprecedented disruption that has shut down countless businesses and entire industries, including many of our customers. This is having a very large impact on advertising revenues. We must take hard but necessary actions to ensure that we endure the crisis and emerge as a strong, healthy and competitive company.
I am deeply saddened that we need to make these painful moves at this time, but they are necessary under the circumstances. We are doing everything in our power to minimize the number of layoffs through shared sacrifice across the organization, but we will still need to eliminate or furlough a significant number of positions. In order to make the transition less painful for our colleagues, we will be providing up to an extra month of additional severance for those individuals for whom their normal severance and the recently announced enhanced federal unemployment benefits provide less support. In addition, we will be providing enhanced employee benefits for furloughed team members.
We will also be taking other cost reduction actions at this time, including the temporary suspension of our dividend and our 401K Company match, the elimination of Q1 and Q2 bonuses, and temporary salary reductions of between 10% and 20% for anyone earning a salary in excess of $50,000 per year. I will be taking a 30% salary reduction. We hope to restore regular salaries, bonus eligibility and our 401K plan match at the start of the third quarter. I very much appreciate the sacrifice that people will be making in these difficult times.
We will get through this crisis and put this all behind us. Better days lie ahead. With the tough but necessary actions we are now taking, we are doing what is required for us to preserve the health of the company and ensure that we are strong when we get to the other side. Our future is further protected by our strong financial position with substantial cash reserves and virtually no debt due before 2024. And when the crisis abates, we look forward to resuming our growth and building on our strong strategic position as a leader in the audio business, including the best lineup of local radio stations in the United States.
I deeply appreciate your dedication and commitment and look forward to better times ahead.
We will be following up with additional information shortly.
The cutbacks follow similar moves made by other broadcasters during the past week. On Monday Townsquare Media Group let 65 employees go and nearly 20 senior executives volunteered to take a 10% temporary pay reduction. The same day iHeartMedia announced steps to reduce costs without resorting to permanent layoffs. On Wednesday, Beasley Media Group eliminated a total of 67 positions across the company and furloughed 18 full-time and several part-time employees Last Friday, Adams Radio Group said all its employees agreed to take a 10% temporary pay cut to prevent any downsizing of the company’s staff.
This week's bad news for radio echos the torrent of Americans filing for unemployment insurance.
The Labor Department reported Thursday more than 6.6 million new claims were filed last week. That brings to 10 million the total Americans who filed over the past two weeks.
That brings the two-week total to about 10 million due to the coronavirus-induced economic shutdown.