“As a result of these longer than expected impacts, a number of companies are extending employee furloughs – and unfortunately we will be doing so as well, extending your furlough period for another 90 days,” the email reads. “We continue to expect that the furlough, which began on April 4, 2020, will be temporary. We know this is not what you hoped to hear, nor is it what we had hoped to do.”
The email goes on to state iHeartMedia will continue offering medical, dental and vision benefits to furloughed employees during the extension, and that the company will notify said employees “should the situation change and point to a speedier economic recovery or staffing need.”
When reached for comment, an iHeartMedia representative told Billboard via email, "As a result of the longer than expected impact of COVID-19 a number of companies are extending employee furloughs – and unfortunately we are doing so as well."
Simultaneous with the staff furloughs, it was revealed in March that iHeartMedia chairman and CEO Bob Pittman would forgo his remaining salary in 2020, while compensation for the company’s senior management team would be cut between 30-70% for the remainder of the year. Pittman and iHeart COO Richard J. Bressler also revealed that new raises would be suspended, while travel and entertainment expenses would be severely curtailed, in an effort to prevent permanent layoffs.
The latest announcement comes midway through a rocky 2020 for the 850 station-strong iHeart, both pre- and post-COVID. In January, the company laid off hundreds of employees as part of a stated effort to “modernize” operations, a move that affected veteran DJs and program directors in major U.S. cities. The company's first quarter earnings release last month was a mixed bag; though broadcast radio revenues fell only slightly and digital revenues improved due to strength in podcasts -- amounting to an overall decline of just 1.9% across segments -- Pittman noted that advertising saw "a sharp decline" in April, setting up what could be a painful earnings picture in Q2.
In May 2019, iHeart lowered its debt from $16 billion to $6 billion as part of a Chapter 11 bankruptcy restructuring. Later that year, media conglomerate Liberty Media -- which specializes in purchasing ailing media companies and turning them around -- reportedly asked the Department of Justice for permission to expand its iHeart investment from 5% to a controlling stake, though it has reportedly received pushback from music companies concerned about Liberty's growing dominance in the broadcast space.
Though Pittman has frequently cited statistics that suggest the reach of broadcast radio continues to grow, iHeart has made a concerted effort to pivot to digital streaming with its iHeartRadio app, which as of January reported 128 million users, though it brings in far less advertising revenue than the company’s AM-FM stations.
You can read the full email below.
As we're sure you've read, the lockdown of businesses and communities across the country due to the COVID-19 virus and related restrictions has lasted far longer than anticipated and has had a significant impact on advertising revenue. Although we as a company are beginning to return to the office in a very limited way, due to these business circumstances, we will not return to full office staffing levels for some time.
As a result of these longer than expected impacts, a number of companies are extending employee furloughs – and unfortunately we will be doing so as well, extending your furlough period for another 90 days. We continue to expect that the furlough, which began on April 4, 2020, will be temporary. We know this is not what you hoped to hear, nor is it what we had hoped to do.
We consider you an important part of iHeart, and we will continue to offer medical, dental, and vision benefits to you, as we have done, through this extended furlough period. Please note that there are important updates to your eligibility for iHeartMedia's Short and Long-Term Disability Plans, and the Life and Accidental Death & Dismemberment (AD&D) Plans which are included in the attached addendum to the Temporary Leave Guide.
Be assured that should the situation change and point to a speedier economic recovery or staffing need, we will notify you and bring you back as soon as we can. If anything changes with you, or if we can offer any guidance or assistance, please contact us at HR4U@iheartmedia.com. If your employment is currently terminable at will, this notice does not affect that status.
We are truly sorry that you have to go through this. We know these are tough times and we very much appreciate your hanging in there with us.
Chief People Officer
125 W. 55th St., 11th Fl.
New York, NY 10019