The E.W. Scripps Company, which owns ten TV stations (including WPTV-Channel 5 in West Palm Beach) and 17 newspapers (the Rocky Mountain News, the Commercial Appeal, and the Naples Daily News among them) announced today that the company is suspending its 401-K match and freezing the company's pension plan. In addition, the TV side will continue its hiring freeze, decrease pay raises, offer early retirements, and institute "voluntary work arrangements" that include four-day weeks.
"We recognize the changes outlined above will be a financial burden for many and I can assure you these decisions were not taken lightly," Scripps President and CEO Rich Boehne wrote in a companywide email. "A comprehensive and wrenching process led us to these decisions, but we must act now to reduce costs and remain competitive."
The entirety of Boehne's email follows.
From: Boehne, Rich.
Sent: Wed Feb 18 13:21:17 2009
Subject: Difficult News
I need to let you know about some difficult decisions that affect all of us here at Scripps. In an effort to control our expenses during these tough economic times, we are making a series of changes to the way we compensate employees.
Do we really have to make these cuts now?
Yes. Scripps has been a vibrant and successful company for 130 years and we intend to be around as an industry leader and attractive employer for many more years to come. Maintaining financial health and flexibility must be a top priority in this environment. The economy is throwing new and bigger challenges at us each day and we intend to have the strength to
I know it's of little comfort as you read this letter today, but please believe me when I say there will be better days ahead. Our economy is busted at the moment and recovery won't come without pain, but the core value of the media business - the news, information and entertainment that we provide each day - has never been in greater demand. There's reason to trust that our current sacrifices can result in future dividends for all us who help create the next successful chapter of the news industry and The E.W. Scripps Company.
Much more specific information to come, but here are the company-wide cost-reduction measures:
-- The company will suspend the match of your 401(k) plan contributions. While you can continue contributing to your retirement savings account, the company match will end beginning with the first pay in April. The match has been an important part of our 401(k) plan and we hope to reinstate it when business conditions improve.
-- The Scripps pension plan will freeze later this year at a date to be determined soon. Importantly, we will offer a transition benefit for those who are close to retirement, and everyone will receive additional details on all the changes -- including the transition benefits -- when we finalize decisions about the freeze.
As a reminder, your accrued pension benefits are protected by law so there is no need to change plans you have regarding the timing of your retirement.
In addition, the television division is taking additional steps to address its unique business needs:
-- The hiring freeze remains in place. Open positions will not be filled at this time.
-- Overtime pay will be curtailed. All overtime will be approved by your general manager.
-- Pay raises for the next year will be smaller than in past years.
-- Several voluntary work arrangements are being finalized including four-day workweeks, time off and early retirement offers. You will receive more details about these programs.
A quick Q&A is attached, but you can direct additional questions to your HR manager or send an e-mail to Questions@Scripps.com.
We recognize the changes outlined above will be a financial burden for many and I can assure you these decisions were not taken lightly. A comprehensive and wrenching process led us to these decisions, but we must act now to reduce costs and remain competitive. To help meet the challenges we face, please try to do all you can to better serve our advertisers and viewers during these tough times for them and us.
Questions and Answers
Do the changes affect all Scripps employees?
These changes affect all employees. If you are covered by an employment agreement or collective bargaining agreement, the agreement will determine how these changes affect you. The need to adjust our expenses for the health of the business will be considered as future collective agreements are discussed.
When will these changes be reviewed and reinstated?
We continually monitor business conditions. Our goal will be to reinstate the pay and the 401(k) plan match as soon as business conditions allow, but the decision to freeze the pension plan will be permanent. You will receive more details about your pension. Those who are closer to retirement will receive additional details on transition benefits.
Can I still contribute to my 401(k) plan while the match is suspended?
Yes, you still can contribute your 401(k) plan.
Will there be any other cost-reduction initiatives for 2009?
We hope these changes are an effective step. Any additional changes will depend on changing business conditions.