JPI Media furloughs 350 staff, imposes pay reductions and directors take 20 per cent pay cut.
Here is the letter to staff from CEO David King (pictured) that has been issued this morning:
Today I am holding a series of calls with you to update you on what further actions we now need to take to sustain the business during the lockdown, and how it will impact you.
You will have seen for yourself that the coronavirus pandemic is putting immense pressure on businesses and public services all around the world. Some businesses have temporarily stopped trading.
We have made arrangements to enable you to work from home wherever possible, and put in strict controls around movement of people at our print sites, all aimed at ensuring you can keep safe and healthy. As you are probably aware, the local and regional newspaper industry has seen a sudden and steep reduction in advertising order volumes which is having a very significant impact on our revenues.
In addition, newspaper circulation revenues have been adversely hit by store closures and lockdown restrictions. Our print contract customers are similarly affected by reduced newspaper sales volumes. To support the business and safeguard jobs during this uncertain period we need to make difficult decisions to control costs and preserve cash.
Whilst we are addressing all costs in the business and looking for savings wherever we can, our staff costs are the biggest single component of our cost base and regrettably we do need to make savings in this area.
First, we will defer all pay rises, which in many cases would have been due at the start of April, for at least three months.
In addition, for all employees with an annual salary of more than £18,000 we will be making temporary pay reductions for three months (from April to June).
The level of pay reduction will vary and we are asking those with higher earnings to bear a greater share of the savings. There will be no reduction on the first £18,000 earned, a 10% reduction on earnings between £18,000 and £40,000, and a 15% reduction on all earnings above £40,000 for those who are working.
I will take a 20% cut on the whole of my salary (as will the Board of Directors). Details of the tiering are attached.
You may also have read that the Government is offering businesses financial support, in the form of a contribution of 80% of salary, up to £2,500 per month per person to fund salaries of staff, where a business does not have work for them to do in the short term.
This scheme is referred to as the ‘Coronavirus Job Retention Scheme’ and allows a business to put a member of staff on ‘furlough’ for up to three months.
After careful consideration, and in light of the significant reduction in advertising volumes, we will require some 250 of our sales staff, and some 100 other staff including some editorial staff to go on furlough for at least three weeks, but most likely for two months and possibly longer.
If you are placed on furlough, it is not a reflection of your performance, but solely the result of the unprecedented current economic conditions we face. We appreciate the hardship that a 20% reduction in earnings would place on those affected. Therefore, the company is attempting to lessen the impact for employees placed on furlough. Those placed onto furlough earning up to £18,000 will not be required to take a pay reduction.
Those above £18,000, will have a reduction of 10% up to £25,000, rising to 15% for those earning above £25,000. No one’s salary above £18,000 will be allowed to drop below £18,000 as a result of these pay reductions.
Staff placed on temporary furlough will not be required to work for us, but can be asked to come back to work at two day’s notice at any time after three weeks of furlough.
You will be notified shortly if you are to be placed into furlough, and further information will be provided at that time. You will also receive a letter confirming this and providing further details.
I appreciate that these are unsettling times, and that nobody wants to take a pay reduction, even for a short period. I recognise that even a small pay reduction will affect household budgets and so we have made every effort to ensure that we limit the impact for those on lower salaries.
We have also made a distinction between those we are asking to continue working, with slightly larger pay reductions for those we are asking to temporarily stop working.
I must emphasise that these are temporary measures. They are only being imposed after a great deal of thought and consideration for what is in the best long-term interests of the business and all of us who work in it.
I very much hope that, if we all follow the Government’s advice, we will all be able to return to work in a more normal environment, sooner rather than later, and that we are then able to lift these temporary measures.