By: E&P Staff
Executives at The Record in Bergen County, N.J., issued a memo to staff on Monday calling for an “austerity program” because the paper is experiencing a $1 million revenue gap so far this year that will likely continue to widen.
“There is no denying the financial crunch we face this year and the cumulative effect of more than $10 million lost in annual revenue during the past two years,” said an unsigned memo, first posted on the Romenesko media news Web site.
“We must now embark on an austerity program that will require all of us to contribute our best efforts while tightening our belts and speaking up wherever we see waste or missed opportunities.”
The plan calls for salary and pension plan freezes, a hiring slowdown, a “continued review of all staffing levels,” and other operational reviews which could include a possible web-width reduction.
The paper, owned by the North Jersey Media Group, cited declining circulation and advertising revenue as the reason for the program.
Below is the complete memo.
Despite industry doomsayers, we believe emphatically in the future ofour products — print and online — and our company. But, by now, many of you know that our Period 1 results leave us with a revenue gap of more than $1 million and the expectation of continuing shortfalls throughout 2007. There is no denying the financial crunch we face this year and the cumulative effect of more than $10 million lost in annual revenues during the past two years.
We are suffering from the same effects of declining circulation and disappearing advertising revenues that have caused an unrelenting flow of bad news for newspapers. We have been addressing this in our marketplace with new initiatives and product changes and we continue to work hard on finding the most appealing mix for our customers. Our years of success have depended on our taking the right steps, no matter how hard, and our willingness as people and as an organization to adjust, adapt, and reinvent as necessary to go forward.
We must now embark on an austerity program that will require all of us to contribute our best efforts while tightening our belts and speaking up wherever we see waste or missed opportunities. We will be meeting with managers in the next few days to discuss our situation and the following restrictions in more detail:
–Salary freeze. As a general rule, there will be no raises this year in wages or salaries.
–Pension Plan freeze. North Jersey Media Group’s pension plan was closed to new participants effective January 1, 2004. The operation of the Pension Plan, including increased government funding requirements and higher premiums to the Pension Benefit Guaranty Corp., is simply beyond the Company’s means. PBGC premiums increased by 59% with pension reform legislation last year and enormous new funding levels would require millions more. We are forced to follow the many larger, more profitable companies that have already frozen their plans, such as IBM, Verizon, Alcoa, Tribune Corp., and many others. As plan costs become increasingly insupportable, the number of traditional defined-benefit pension plans has dropped dramatically among mid-size employers as well as Fortune 1000 companies.
In this economic environment, we have no choice but to freeze Pension Plan benefits for participants as of March 31st. Benefits accrued under North Jersey Media Group’s plan will remain intact for participants until retirement but will not increase beyond their value as of March 31st. If you are not yet vested in your pension benefit, or if you have fewer than the number of years required for early retirement, you can continue to earn credit for your service with the Company solely for the purposes of vesting and eligibility for early retirement. Plan participants who are affected by the freeze will receive individual notification
Please note that the Company’s matching contribution under the Retirement Savings Plan [401(k)] has not been affected at this time. The Company will continue to match 75% of the first 4% of pay contributed to the Retirement Savings Plan. All employees are encouraged to participate in this important savings program for their own financial security at retirement.
–Hiring slowdown. It is not feasible to freeze hiring for all open positions; however, every open position will come under careful review for essential criteria before the replacement or hiring process will be permitted to begin.
–Continued review of all staffing levels. While it is our intent to avoid layoffs, we will continue to examine all operations for waste in manpower or process.
–Operational savings review. We will continue to look at all possibilities, such as further reduction of our newsprint web size, and cost-cutting in other expenses such as utilities, capital outlay, etc.
We know this is not welcome news. It is painful for us to impose these measures. We value our employees and the talent and dedication that have enabled us to succeed over many years; we look to that same creativity and commitment from everyone who wants to be part of the solution. Please don’t hesitate to send us your suggestions and ideas.
Very simply, we need and seek everyone’s help