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Union-Tribune President Gene Bell today (Jan. 16) sent a memo to staffers outlining draconian salary and benefits cuts and warning of even more layoffs to come. For February and March, pay cuts will range from 9.25 percent for lower-rank employees to 18.5 percent for executives. (Heretofore, almost all sacrifices by employees have been made by non-executives. There have been few staff reductions of management personnel. This move marks a change.) For 2009, merit increases will be frozen. The company will no longer match employee contributions to 401(k) accounts. The severance plan has been weakened substantially. In February and March, employees will be required to take furlough days without pay, varying by level. Employees' share of the health plan premium cost will rise to 20 percent. Bell said that advertising revenue has plunged 40 percent since 2006. The Copley Press put the Union-Tribune up for sale in July. "We knew then that the environment for such a sale would be challenging, as indeed it has proven to be," wrote Bell. "Regardless of who owns it, ours will be a smaller business in the future than it has been in the past," he said, warning of "dramatic changes in our cost structure," which will mean a "reduction in force" soon. Obviously, employees who elected not to take earlier buyouts will be even more anxiety-ridden as the company decides who goes to the guillotine and has to accept a much lower severance package.
Union-Tribune President Gene Bell today (Jan. 16) sent a memo to staffers outlining draconian salary and benefits cuts and warning of even more layoffs to come. For February and March, pay cuts will range from 9.25 percent for lower-rank employees to 18.5 percent for executives. (Heretofore, almost all sacrifices by employees have been made by non-executives. There have been few staff reductions of management personnel. This move marks a change.) For 2009, merit increases will be frozen. The company will no longer match employee contributions to 401(k) accounts. The severance plan has been weakened substantially. In February and March, employees will be required to take furlough days without pay, varying by level. Employees' share of the health plan premium cost will rise to 20 percent. Bell said that advertising revenue has plunged 40 percent since 2006. The Copley Press put the Union-Tribune up for sale in July. "We knew then that the environment for such a sale would be challenging, as indeed it has proven to be," wrote Bell. "Regardless of who owns it, ours will be a smaller business in the future than it has been in the past," he said, warning of "dramatic changes in our cost structure," which will mean a "reduction in force" soon. Obviously, employees who elected not to take earlier buyouts will be even more anxiety-ridden as the company decides who goes to the guillotine and has to accept a much lower severance package.