Singing Blues: Westwood One Institutes Furloughs, Pay Cuts

big red scissors

In another sign that the second half of 2009 is not treating radio much better than the first, Westwood One employees will be required to take five days of unpaid leave and a pay cut equivalent to five days, both to be distributed over a 10-week period in the third quarter.

These cutbacks at Westwood One bode ill for the radio business in general as it moves into the final quarter of 2009, traditionally a strong period for the medium.

According to Rod Sherwood, president of Westwood One, a series of major cost cuts over the last year have failed to put the company on a sound financial footing, especially as the ad revenue slump appears to be continuing into the final months of the year.

"We have experienced a revenue shortfall this third quarter, and we face continued uncertainty in the fourth quarter. Moreover, no one can accurately predict when a sustainable recovery in the advertising marketplace and the radio business will begin."



Of the five mandated days of unpaid furlough, two are scheduled to fall on Thanksgiving and the following day, leaving three days to be taken at the discretion of employees. Looking to the future, Westwood One is setting up a bonus plan for 2010, offering up to five days additional pay to employees who meet certain performance-based objectives.

Unpaid furloughs have become a favorite tactic of some beleaguered traditional media companies as they try to set their finances in order.

So far, they have been mostly limited to newspaper publishers like Gannett, McClatchy, Advance Publications and Media General. Recently, they have crept into the radio business as well. Cumulus ordered employees to take five days of unpaid furlough time between May 1 and June 30, and a number of individual stations affiliated with big radio groups have also adopted the measure.

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