Meredith employees are facing the same music that many in the media industry are already confronting during the Covid-19 pandemic.
The media company—whose holdings include 17 local television stations—originally thought it would avoid coronavirus-related cuts. But it has changed its tune and is now implementing temporary salary cuts company-wide as well as a hiring freeze and employing less freelance employees.
The move comes at a time when local news consumption is at an all-time high, but advertisers continue to drop off.
“With most of our employees 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,” said Meredith president and chief executive officer Tom Harty. “Traffic to our digital properties is robust, viewership for our local news broadcasts is high and print subscriptions remain steady. Given recent lifestyle changes, our content is particularly relevant now as more Americans are spending time at home and are demonstrating expanded interest in DIY, food and entertainment, as well as local news programming.
“At the same time, the Covid-19 crisis has created an extremely challenging business environment, including significant advertising campaign cancellations and delays,” continued 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.”
Here’s a breakdown of the cuts:
Approximately 40% of Meredith’s approximately 5,000 employees will not receive any pay reduction. Approximately 45% will receive a 15% pay reduction.
The remaining 15%—which comprises Meredith’s highest paid employees—will receive pay reductions ranging from 20% up to 40% for president and CEO Tom Harty and the board of directors.
Employees receiving a pay reduction will be receive one day of leave per week from May 4 through Sept. 4. [UPDATE: Meredith later said the company had made an error in the release, and will in fact be giving its employees paid days off, not unpaid days.]
Meredith also announced effective immediately it will be implementing a wage, salary and hiring freeze, and a significant reduction in temporary and freelance usage.
Meredith is taking these actions in response to the economic impact of Covid-19. The company will reassess plans in late summer.