‘Unpaid vacation’ gives no break to iHeartMedia staffers

iHeartMedia Chicago

For the second time this month iHeartMedia is citing the economic impact of the COVID-19 pandemic for cutting the pay of its employees.

On Tuesday the radio giant announced those who earn more than $50,000 a year will be required to take two weeks of “unpaid vacation” before the end of 2020.

While iHeartMedia is far from alone in making cutbacks, the company’s use of language is especially insidious. In January — before the coronavirus shutdown — iHeartMedia referred to the layoff of as many as 1,000 employees (including Chicago personalities Chris Michaels, Michael “DJ MoonDawg” Muniz and Trace Hamilton) as “transformation and modernization initiatives.”

“It takes a special level of evil to brand this robbery as ‘unpaid vacation,’” a rival radio executive texted me Tuesday.

The latest move comes weeks after the company ordered 90-day furloughs for hundreds of full-time and part-time employees, including more than 30 at iHeartMedia Chicago.

The iHeartMedia cluster here includes urban contemporary WGCI 107.5-FM, urban adult-contemporary WVAZ 102.7-FM, Top 40 WKSC 103.5-FM, adult contemporary WLIT 93.9-FM, country WEBG 95.5-FM, and gospel WGRB 1390-AM.

“We’ve had to make some difficult decisions which you’re aware of to address the economic impact on our company, and we have done our best to find ways to reduce that impact while avoiding layoffs,” wrote chairman/CEO Bob Pittman and COO/CFO Rich Bressler in a memo to employees.

“Unfortunately, the longer than anticipated shutdown of businesses means that we must do more, with the goal of keeping our business healthy while still avoiding permanent layoffs.”

Despite the company’s promises, some industry analysts believe the “unpaid vacations” are a precursor to another wave of mass firings.

“No pay is no vacation and as it turns out iHeart’s promise to make this their last action impacting employee compensation is a red herring for what they really mean,” wrote Jerry Del Colliano in Inside Music Media.

“The unpaid iHeart vacationers are not just going without pay for two weeks. Many are next in line to be fired.”

Here is the text of the memo from Pittman and Bressler:

Team,

We’re sure you have seen news stories about states’ extended stay-at-home orders and questions about the continuing impact of COVID-19 on businesses across the country, and that includes our business as well. We’ve had to make some difficult decisions which you’re aware of to address the economic impact on our company, and we have done our best to find ways to reduce that impact while avoiding layoffs.

Unfortunately, the longer than anticipated shutdown of businesses means that we must do more, with the goal of keeping our business healthy while still avoiding permanent layoffs.

Therefore, after reviewing all of our options, we are taking a difficult step but one that we hope will be our last action impacting employee compensation: Requiring that employees who make over $50,000 a year in base compensation – excluding bonuses, overtime or commissions — and who have not already volunteered to take a salary reduction of 5% or more, to take two weeks of unpaid vacation in calendar year 2020, with the first vacation week taking place between now and June 30 and the second vacation week taking place between July 1 and September 30. These two unpaid vacation weeks in total are the equivalent of an approximately 4% salary reduction for the year and must be scheduled with your manager to ensure appropriate staffing at all times.

Please know we did not make this decision lightly. And it was a tough decision; we had hoped that business would return sooner, and we had also wanted to contain the financial sacrifice to the senior management ranks and those who voluntarily joined us in compensation reductions.

We look forward to, and hope for, an upturn in our critical advertising revenue as businesses begin to gradually return.

Finally, we want you to know how much we value and appreciate how well you’ve adjusted to our temporary work-from-home environment and the contributions you are making to help our company, our communities and our colleagues through these tough times.

Thanks.

Bob and Rich

Tuesday’s comment of the day: David Stewart: As a former news person I may be biased, but I think “Virus-Free Friday” [on WGN 720-AM] is an irresponsible stunt. People turn to talk radio in a crisis or emergency and it’s a broadcaster’s legal responsibility to serve the public’s interest, convenience and necessity. This seems like a backhanded way to minimize Trump-bashing on the air. As always, though, the ratings will determine success or failure. In the meantime, people can easily turn to WBBM or WBEZ for information. Let’s see if they do.