To all employees:
As you saw from its recent earnings report, McClatchy is making solid progress navigating through this recession and transitioning into a true multimedia company. But the economy remains dicey and we continue to experience revenue declines. So we must remain focused on controlling costs until we see measurable, sustainable revenue improvement.
To that end, McClatchy and The Star are announcing three initiatives to keep the company financially strong as we end 2009:
McClatchy is extending the current wage freeze for all employees (including those at corporate) at least through December of this year. While we hope to restore merit increases in 2010, much will depend on how quickly revenues rebound and how our own budget looks going into next year.
I know this is a hardship, and I very much appreciate the sacrifices all Star employees have made to keep our company strong and safely above water during this economic storm. Please know that the entire senior team is committed to lifting the salary freeze as soon as financially possible.
I’m sorry to inform you that The Star will be joining many other companies and newspapers across the country by instituting a one-week unpaid furlough program for most employees. The furlough period will run through the remainder of this year. Next week, you will be receiving a scheduling form to complete and return to your manager, and a Q&A to assist you in understanding how the program works.
Human Resources also will be holding meetings to review the program and answer questions.
While the documents are fairly detailed, we want you to have the opportunity to get answers to any additional questions you might have. The meeting dates will be announced soon.
Finally, we will be offering a Voluntary Separation Program to the majority of regular, full-time employees at The Star. We are doing this because many employees continue to express interest in a voluntary program during this time of industry transition, and because we want to put The Star in the best financial position possible going into 2010.
We have not established a quota or target for this voluntary program, but we expect it to be considerably less than the last round of involuntary cuts. As usual, we will limit or exclude eligibility in certain departments and divisions, especially revenue areas, based on business needs and so that no one area or department is unfairly impacted. We also will exclude positions where we do not see further opportunities to streamline, consolidate or transfer work. Those employees eligible for this program will be receiving individual packets today, and HR will be holding meetings this Wednesday and Thursday in the Press Pavilion to discuss this voluntary program and answer any questions you may have.
As your publisher, I am deeply sorry to announce the furlough and continued wage freeze. I know how discouraging this news may be, especially on top of the cuts and consolidations we have already faced together during this recession. We are working as hard as we can to position the company for long-term success and to minimize further impact on employees.
I can tell you that because of your dedication and talent, we are seeing improvements in many areas across The Star. We continue to be leaders in McClatchy and across the industry in online revenue and growth, we have a strong portfolio of magazines, commercial print customers and other niche products, and we’ve launched successful new programs aimed at boosting advertiser frequency and new business in our core newspaper. In fact, June and July were our strongest months so far this year in advertising revenue compared to 2008. So trends appear to be stabilizing and possibly improving.
The moves announced today, coupled with current trends, should put us in the strongest position possible entering next year. My thanks to each of you for everything you’ve done to keep The Star safe. Your efforts during this difficult time have been nothing short of outstanding and will benefit Star readers and advertisers for generations to come.
If you have any questions about this note or other compensation issues, please contact Chris Piwowarek in Human Resources.
Thanks to the readers who sent this to me.