Meredith Corp. on Monday, citing a “significant” decline in advertising revenues due to the COVID-19 crisis, announced several cost-cutting measures including reductions in pay for about 60% of Meredith’s 5,000 employees.
The company’s highest-paid employees, including CEO Tom Harty and the board of directors, representing about 15% of the company’s staff, will get pay cuts ranging from 20% to 40%.
About 45% of the company’s employees will get a 15% pay cut.
The pay cuts will be in effect from May 4 through Sept. 4. Employees whose pay is being reduced will get one day of paid leave per week during this period. Wages, salaries and hiring is being frozen and freelance usage is being cut as well.
Meredith said it is withdrawing the financial guidance it gave to Wall Street about its financial performance. It also paused its stock dividend and is making other moves to control costs and capital expenditures.
“The COVID-19 crisis has created an extremely challenging business environment, including significant advertising campaign cancellations and delays,” said Harty. “While our financial position is strong, given the impact on advertising – which represents approximately half of our revenue mix – we are proactively taking aggressive actions to strengthen our liquidity and enhance our financial flexibility in the near-term to effectively navigate the current environment.”
Harty noted that most of the company's employees are now working remotely.
“The Meredith team has risen to the challenge and continues to successfully serve our clients and consumers and demonstrate the enduring value of Meredith,” he said, noting that digital traffic is up, local news viewership is high and print subscriptions are steady.
Meredith’s company’s TV stations have increased their local news output, but the company as a whole has seen “significant advertising campaign cancellations and delays.”
“I continue to be confident in the strength and resilience of Meredith’s diversified business model,” Harty said. “The actions we are taking do not come lightly, but are necessary to strengthen our liquidity and enhance our financial flexibility.:
“While this is currently a difficult time for our employees and shareholders alike, as a Board we believe these actions are important to best position Meredith for future success,” added Board Vice Chairman Mell Meredith Frazier. “Together, we will weather this difficult period as we have during other times in our 118-year history, and emerge as an even stronger company that we can continue to be proud of.”
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.