North Jersey Media Group Caps Severance At 12 Weeks’ Pay

By: Joe Strupp

Owners of The Record of Hackensack, N.J., and the Herald News in West Paterson, N.J., are implementing a new cap on severance pay that will limit departing staffers to 12 weeks’ severance no matter how long they have worked for the company.

North Jersey Media Group, which also owns 45 weeklies and prints USA Today, provides one week of salary for each year of employment to those forced to leave the company. In the past, that could have equaled up to 52 weeks of salary for any employee, except those at the weeklies, according to Linda Iceland, corporate communications manager.

In a memo to staff last week, however, the company announced that the severance would now be capped at 12 weeks’ pay for all employees.

“We have adopted that across the board,” Iceland said about the 12-week limit. “It is a necessity right now. We have had several job eliminations and severance payouts are becoming an untenable drain on cash flow.”

Iceland noted the layoff in May of 44 manufacturing jobs, as well as a recent copydesk reorganization that resulted in 12 people leaving. She said that many of those staffers had been offered a chance to apply for other jobs, but declined.

North Jersey Media Group employs approximately 1,450 people throughout the company, Iceland said.

In a related move, the company also announced it would suspend a scholarship and matching grant program in order to save about $65,000 annually, according to a memo sent Tuesday from Malcolm Borg, chairman of the board.

“I regret to announce that NJMG must suspend two corporate programs that have been very dear to me: the Donald G. and Flora A. Borg Merit Scholarship program for the children of eligible NJMG employees, and the Matching Gifts program under which the company matched employee and retiree donations to qualified educational institutions,” the memo stated, in part. “We are doing everything we can to save money in all areas throughout the company. While we have taken pride in these programs over the years, they are luxuries we cannot afford in our present financial circumstances.”

Borg wrote that “The Matching Gifts program typically costs us an average of $25,000 annually. The scholarship program typically costs the company $40,000 a year. As students complete their undergraduate studies, without adding new recipients, we will realize the savings.”

That announcement follows word this week that the Record would likely vacate its main offices in Hackensack by January 2009 in an effort to save some $2.4 million. The change would relocate some operations to the Herald News site, while moving numerous news staff to either weekly locations or to assignment as “mobile journalists,” who work out of homes or cars and utilize laptops and other mobile devices more.

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