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Media General Requiring Employees to Take 15 Furlough Days Before End of the Year

Calling it “a sign that traditional media business models continue to be in transition,” Media General CEO Marshall Morton announced to staff on Thursday that the company is requiring its employees to take 15 furlough days before the end of the year.

“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,” writes Morton in a memo obtained by Poynter. “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 owns 18 TV stations, including Providence’s WJAR and Tampa’s WFLA, as well as 21 daily newspapers. Full memo inside…

From: Marshall Morton
Sent: Thursday, June 23, 2011 2:00 PM
Subject: Letter from Marshall Morton

June 23, 2011

Dear Fellow Employees,

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. 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. As a result, properties across the company have had to lower their cash flow expectations several times this year.

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. 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. I am sorry to say that Media General employees at all levels will be asked to take 15 furlough days in the second half of this year.

Earlier this year, all operations and corporate departments reduced discretionary spending. More recently, several operations implemented targeted reductions in force to address particular market challenges. Unfortunately, the expense reductions implemented to date are insufficient to meet our cash flow goal. Compounding this situation is the fact that the economic outlook for the second half of the year continues to be uncertain.

The furlough program will cause financial disruption for employees and scheduling challenges for our operations. It’s little comfort that we are not alone. Other media companies have implemented layoffs and furlough programs this year. In addition to the impact of the weak economy, it’s a sign that traditional media business models continue to be in transition.

I know that everyone is working very hard to help manage through this difficult environment—you know that each of you has a role to play as we transform our business to a digital media model. Our future success is being built from the effective operation and extension of today’s operations. I urge everyone to participate in your local innovation process for creating new products and services. You have proven they work and we will grow on their success.

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.

A Furlough Q&A is on the Meganet. If your question is not answered, please talk with your supervisor or Human Resources office.

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