In a swift move to cut millions in expenses, Media General, the Richmond-based newspaper and TV giant, told its employees Thursday that they must take 15 unpaid days between now and the end of 2011. Media General owns the Richmond Times-Dispatch.
The news was announced to employees in a letter Thursday afternoon from Media General CEO Marshall Morton. BizSense obtained a copy of the letter, and Media General spokesman Ray Kozakewicz confirmed that the announcement had gone out to all company employees via email today.
The furlough days apply to employees at all levels and throughout all divisions of Media General, which includes newspapers, mostly notably the Times-Dispatch, TV stations and websites.
“As we approach the midpoint of 2011, the much anticipated economic recovery continues to be unevenly felt across our markets, and, more recently, the economy has faltered,” Morton said in the letter.
“While new revenue and website growth initiatives have been successful, these efforts have not produced enough revenues to offset declines in our traditional lines of business.”
The furlough days will save the company approximately $9 million, Kozakewicz said.
Such savings are vital for a company that lost $22.6 million in 2010, which was an improvement over its $35.7 million loss in 2009. Revenue at its print products in particular have been in decline as the newspaper industry continues to find its place in the digital age.
“In order to reach our cash flow goal for the year, which has again been lowered from our initial expectations, we must cut expenses in the second half of the year,” Morton said. “One of the fastest ways to flow expense savings to the bottom line, without broad-based permanent layoffs, is a furlough program – something we had hoped we would not need to do this year.”
Media General isn’t the first newspaper company to institute furlough days for its employees. Nor is this the first time Media General has made such a move.
According to Kozakewicz, Media General employees were forced to take 15 furlough days in 2009. The company did pay employees back for two of those days in 2010.
Morton said in the letter Thursday that the company has told all departments to cut discretionary spending and ordered several of its operations to reduce their employee counts.
“Unfortunately, the expense reductions implemented to date are insufficient to meet our cash flow goal,” Morton said. “Compounding this situation is the fact that the economic outlook for the second half of the year continues to be uncertain.”
Morton ended his letter with some words of encouragement.
“Next year is not far off, and it’s one that is expected to be strong for Media General, with political advertising, the Summer Olympics and continued success with new revenue initiatives. I am grateful for your diligence as we bridge ourselves to better times.”
In a swift move to cut millions in expenses, Media General, the Richmond-based newspaper and TV giant, told its employees Thursday that they must take 15 unpaid days between now and the end of 2011. Media General owns the Richmond Times-Dispatch.
The news was announced to employees in a letter Thursday afternoon from Media General CEO Marshall Morton. BizSense obtained a copy of the letter, and Media General spokesman Ray Kozakewicz confirmed that the announcement had gone out to all company employees via email today.
The furlough days apply to employees at all levels and throughout all divisions of Media General, which includes newspapers, mostly notably the Times-Dispatch, TV stations and websites.
“As we approach the midpoint of 2011, the much anticipated economic recovery continues to be unevenly felt across our markets, and, more recently, the economy has faltered,” Morton said in the letter.
“While new revenue and website growth initiatives have been successful, these efforts have not produced enough revenues to offset declines in our traditional lines of business.”
The furlough days will save the company approximately $9 million, Kozakewicz said.
Such savings are vital for a company that lost $22.6 million in 2010, which was an improvement over its $35.7 million loss in 2009. Revenue at its print products in particular have been in decline as the newspaper industry continues to find its place in the digital age.
“In order to reach our cash flow goal for the year, which has again been lowered from our initial expectations, we must cut expenses in the second half of the year,” Morton said. “One of the fastest ways to flow expense savings to the bottom line, without broad-based permanent layoffs, is a furlough program – something we had hoped we would not need to do this year.”
Media General isn’t the first newspaper company to institute furlough days for its employees. Nor is this the first time Media General has made such a move.
According to Kozakewicz, Media General employees were forced to take 15 furlough days in 2009. The company did pay employees back for two of those days in 2010.
Morton said in the letter Thursday that the company has told all departments to cut discretionary spending and ordered several of its operations to reduce their employee counts.
“Unfortunately, the expense reductions implemented to date are insufficient to meet our cash flow goal,” Morton said. “Compounding this situation is the fact that the economic outlook for the second half of the year continues to be uncertain.”
Morton ended his letter with some words of encouragement.
“Next year is not far off, and it’s one that is expected to be strong for Media General, with political advertising, the Summer Olympics and continued success with new revenue initiatives. I am grateful for your diligence as we bridge ourselves to better times.”
What a bush league company! When are their lenders going to start asking questions as to the competence of their senior management?
Absolutely shameful- Marshall Morton the CEO made $1,986,000 this past year according to the last proxy statement. In 2009, his total compensation was $1,350,000. Why is the CEO getting a 30% pay increase off the backs of employees?
Maybe the newspaper should look at what they are and are not printing each day. They seem to find space for Eric Cantor everyday. He is not that news worthy. Local sports events end to late for their deadlines, however if its a republican event it makes the paper, regardless of the lateness of the hour. Since the readers seem to be split 50/50 the newspaper should appeal somewhat equal to both parties. Having been subscriber for many years and threated every week to end it, maybe this will force me to change my habits and use the computer to… Read more »
“They seem to find space for Eric Cantor everyday. ”
Well they should, his wife Diana is on the board of Directors….sitting on between 250,000-500,000 worth of stock options….(only non WASP male on the board…)
The RTD is in self-destruct mode. I’m so sick of them trying to pawn off their paper on me at the grocery store or in my driveway. I read news online like everyone else under the age of 60. Quicker, cleaner, more up-to-date. Now the RTD website is requiring Facebook membership to participate. I deleted their site from my bookmarks yesterday. They won’t be missed.