Entercom Communications Corp. will restore full salaries for its roughly 4,400 employees in July – three months after implementing companywide cuts designed to mitigate the impact of the coronavirus pandemic. Other cost-cutting measures, though, will remain in effect for the remainder of the year to offset a portion of lost revenue.
In an internal memo sent Wednesday morning and obtained by the Philadelphia Business Journal, Entercom CEO David Field said it was not an easy decision, noting that other companies have announced salary reductions will continue through the rest of 2020.
At Philadelphia-based Entercom, which operates 235 radio stations in 46 markets across the U.S., salaries were reduced temporarily for every full-time employee making over $50,000 per year by between 10% and 20% in late March as part of a broader cost-cutting plan. Field said returning to normal salary levels reflects how the company views potential growth opportunities moving forward.
Field noted that there are several positive signs, such as improved Covid-19 health outcomes as the medical community gets a better grasp on the virus. He said advertising had “improved significantly” in recent weeks since bottoming out in April and that the company was “cautiously optimistic” about the months ahead.
“Many sectors of the economy are bouncing back, such as auto, homebuilding, and retail,” Field said. “Better days lie ahead.”
Despite those improvements, Field said Entercom has to be realistic about the recent spike in Covid-19 cases and that economic and social issues will not be resolved immediately.
“The path ahead, while positive, is also likely to be bumpy, but we will rise to the occasion and battle forward just as past generations have done in difficult times throughout history,” Field said.
Because of the severe financial impact of the pandemic, Field said other cost-saving measures will remain in place.
To mitigate the financial impact of Covid-19, Entercom made a series of cost-cutting moves in late March. In addition to the salary cuts, the company instituted a “substantial” reduction in its workforce, including several employees at its six local radio stations. Entercom also suspended its dividend and 401(k) company match, and eliminated first- and second-quarter bonuses.