“I am deeply saddened that we need to make these painful moves at this time.”
Those are the words of Entercom Communications President/CEO David J. Field, who in an internal memo distributed to all employees Thursday morning (4/2) revealed that the coronavirus pandemic — which led the audio media company to exhaust all available dollars under the revolver portion of its credit agreement — is claiming jobs.
In a passionate “important company update,” Field thanked Entercom employees for their “resilience, dedication and fortitude” as the company — like so many others — weaves through the devastating COVID-19 pandemic.
“We are fortunate to work in an industry that plays such an important role in our country at a time of crisis, providing a critically important and trusted local voice for news and information as well as entertainment, companionship and respite during these uncertain times,” Field continued.
Only, there will be fewer Entercom staffers serving their constituency during this time of crisis.
Noting that he is “deeply saddened” that Entercom needs to make these “painful” moves — changes that are “necessary under the circumstances,” layoffs are taking place.
How many individuals that are impacted by the temporary and permanent roster reductions is not publicly known; an Entercom representative did not immediate respond to RBR+TVBR‘s early Thursday request for comment.
In the memo, Field said, “We are doing everything in our power to minimize the number of layoffs through shared sacrifice across the organization, but we will still need to eliminate or furlough a significant number of positions.”
In order to make the transition less painful, Entercom is providing up to an extra month of additional severance — but only for those individuals for whom their normal severance and the recently announced enhanced federal unemployment benefits provide less support.
In addition, Entercom will be providing enhanced employee benefits for furloughed team members to help soften the pandemic-based interim job loss.
With the P&L across broadcast media severely damaged by the coronavirus crisis, Field said, “the severity of the situation necessitates us making significant cost reductions in order to cope with the realities at hand … This is having a very large impact on advertising revenues. We must take hard but necessary actions to ensure that we endure the crisis and emerge as a strong, healthy and competitive company.”
This includes Entercom’s actions reported Wednesday by RBR+TVBR, namely the drawing of $146.5 million under the revolver portion of its credit agreement via two transactions. On March 18 Entercom drew $50 million from its credit facility. On March 25, it moved forward with a $96.5 million draw.
The disclosure, via a SEC filing, also revealed that the company’s already reduced dividend is being temporarily suspended, effective in the second quarter.
Field’s memo distributed this morning adds that Entercom’s 401(k) company match has also been suspended, and that Q1 and Q2 bonuses have been eliminated.
Temporary salary reductions of between 10% and 20% for anyone earning a salary in excess of $50,000 per year are being implemented.
Field will see a 30% reduction in salary.
“We hope to restore regular salaries, bonus eligibility and our 401(k) plan match at the start of the third quarter,” Field added.
Concluding that he appreciated Entercom staffers’ dedication and commitment, Field said, “We will get through this crisis and put this all behind us. Better days lie ahead. With the tough but necessary actions we are now taking, we are doing what is required for us to preserve the health of the company and ensure that we are strong when we get to the other side. Our future is further protected by our strong financial position with substantial cash reserves and virtually no debt due before 2024. When the crisis abates, we look forward to resuming our growth.”