The Pain Continues For iHeart Employees

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They were told by e-mail yesterday that if they make over $50,000, and have not already volunteered to take a 5% pay cut, they will be required to take two weeks off without pay. iHeart has 850 radio stations across the country that employ thousands of people. Here’s the note CEO Bob Pittman and CFO Rich Bressler to employees.

Team,

We’re sure you have seen news stories about states’ extended stay-at-home orders and questions about the continuing impact of COVID-19 on businesses across the country, and that includes our business as well.  We’ve had to make some difficult decisions which you’re aware of to address the economic impact on our company, and we have done our best to find ways to reduce that impact while avoiding layoffs.

Unfortunately, the longer than anticipated shutdown of businesses means that we must do more, with the goal of keeping our business healthy while still avoiding permanent layoffs.

Therefore, after reviewing all of our options, we are taking a difficult step but one that we hope will be our last action impacting employee compensation: Requiring that employees who make over $50,000 a year in base compensation – excluding bonuses, overtime or commissions — and who have not already volunteered to take a salary reduction of 5% or more, to take two weeks of unpaid vacation in calendar year 2020, with the first vacation week taking place between now and June 30 and the second vacation week taking place between July 1 and September 30.  These two unpaid vacation weeks in total are the equivalent of an approximately 4% salary reduction for the year and must be scheduled with your manager to ensure appropriate staffing at all times.

Please know we did not make this decision lightly.  And it was a tough decision; we had hoped that business would return sooner, and we had also wanted to contain the financial sacrifice to the senior management ranks and those who voluntarily joined us in compensation reductions.

We look forward to, and hope for, an upturn in our critical advertising revenue as businesses begin to gradually return.

Finally, we want you to know how much we value and appreciate how well you’ve adjusted to our temporary work-from-home environment and the contributions you are making to help our company, our communities and our colleagues through these tough times.

Thanks.

Bob and Rich

8 COMMENTS

  1. Chris, I get that, and you’re right. I should have made clear that it looks like the way it’s structured, sales *management* – those with a very healthy base/guarantee – won’t be taking the same hit. It’s true, we’re all getting whacked. When you look at companies like iHeart, you really see the enormous amount of debt they *chose* to create for themselves through a different lens these days.

    • Thanks for clarifying, Rob. But by your same argument, sales management *will* be taking the same hit, since a large part of their total income is base salary. So wouldn’t that be affected by the same cuts as everyone else? And since their overrides are based on exceeding goals, it’s unlikely any will hit that threshold for the foreseeable future. Just showing the grass on the other side. We all just need to do what’s best for the industry so that we can bring the advertisers back to us as quickly as possible. Stay safe!

  2. This headline is irresponsible, and a slimy way to try and get clicks. I work for iHeart and am so grateful to be with a company that is doing EVERYTHING possible to avoid laying off their employees. My wife’s company unfortunately laid off 25% of their entire company to protect top position’s salaries and lifestyles, as opposed to trying to retain their workforce through this unique crisis. Bob Pittman is taking $0 for the rest of 2020. Find something better to report on or you’ll lose all your readers to better and more reliable sources, such as insideradio.com

    Anyone complaining who is still getting checks from the company is extremely ungrateful in my opinion. The alternative would be the unemployment line.

    Stay safe everyone.

    • The headline is spot on. I am happy that you have a job but many recently laid off and furloughed employees don’t. This is MORE pain for iHM employees. While Bob and Rich sit comfortably in their blush NYC digs, the rest of the company takes the hit. The only reason they haven’t laid off more employees is there is no one left to cut. They already laid off roughly 10% of their workforce in January to create more shareholder value on the then pending Liberty purchase. Other than AEs, staffers are doing the jobs that 2 or 3 people used to do. There is no meat left on the bone. Salary cuts and forced vacations is all they have left to deal with swift and deep reduction in ad revenue.

    • Is your last name Pittman??

      You want to add up good old Bob’s total compensation since he bought his job at Clear Channel??

      Didn’t think so…

  3. Before you condemn salespeople, Rob, please understand that the vast majority of salespeople work on 100% commission. So if they don’t sell any advertising, they don’t eat. And right now, the reason why you have to take a 5% pay cut (or 4% in terms of unpaid vacation), is because advertising has been significantly curtailed. So salespeople will be lucky if they’re making 50% of what they normally make. Pretty sure they wouldn’t mind trading places with you right now. So you might want to consider the impact this crisis is having on the entire team. Remember…we’re all in this together. Good luck, and stay healthy.

  4. “Excluding commissions”. So in other words, talent, production & support staff are forced to take cuts, but Sales skates. Typical.

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