iHeartMedia Plans Furloughs as Leadership Takes Pay Cuts

Courtesy of iHeartMedia

To avoid layoffs during the coronavirus crisis, the world's biggest radio company, iHeartMedia, will furlough an unspecified number of employees for 90 days, Billboard has confirmed. As well, chairman and CEO Bob Pittman will forgo his remaining 2020 salary and the senior management team will take 30–70% cuts in 2020 compensation.

"Although we have had to make hard decisions to address the economic impact of the downturn, our management team has found ways to reduce our company's expenses without resorting to permanent layoffs," reads an note to employees from Pittman and president, CFO and COO Richard J. Bressler, first reported by AllAccess.

IHeart, which has more than 850 stations, let go hundreds of employees in January to "modernize" operations. The company has moved aggressively to streaming in recent years, growing its app listeners to 128 million. According to studies, traditional broadcast advertising has declined in recent years while less-lucrative digital advertising has grown. Pittman said in an interview last year that broadcast radio was "the most misunderstood medium in the world, because very few people look at the facts" and "radio's been growing." But that was before the coronavirus pandemic and shelter-in-place orders took effect around the country -- iHeart's stock has plunged from $15 to $7 this month, although it jumped 68 cents at close on Monday (March 30).

Last year, iHeart restructured its debt in a Chapter 11 bankruptcy proceeding that lowered it from $16 billion to $6 billion. Employees laid off in January speculated the company would drift from "live and local" programming and fill its mid-market stations, in particular, with syndicated shows and content from its central office.

As coronavirus ravages the world economy, forcing layoffs, furloughs and salary cuts at companies from Macy's to Disney, Pittman and Bressler said iHeartRadio would suspend new raises and strictly limit travel and entertainment expenses. "We believe all of these reductions give us more room to protect jobs," they wrote in the memo.