Radio broadcasting giant iHeartMedia is aiming to cut $250 million in costs this year, including furloughs and pay cuts, as it looks to weather the economic fallout from the coronavirus pandemic iHeart Chairman and Chief Executive Bob Pittman said in a Tuesday statement that iHeart’s senior management team and some other employees “voluntarily agreed to …
Radio broadcasting giant iHeartMedia is aiming to cut $250 million in costs this year, including furloughs and pay cuts, as it looks to weather the economic fallout from the coronavirus pandemic
iHeart Chairman and Chief Executive Bob Pittman said in a Tuesday statement that iHeart’s senior management team and some other employees “voluntarily agreed to take meaningful reductions in compensation” during the downturn, although he didn’t give specifics.
“We want our shareholders to know that we have taken immediate and proactive steps to weather this crisis,” Pittman said, without specifying the magnitude of the cuts to come.
The San Antonio-based firm had already expected $50 million in savings related to a modernization initiative announced in February. It now anticipates an additional $200 million in operating expense savings for 2020 driven by the reduced compensation as well as furloughing of an unspecified number of employees “that are non-essential at this time,” the company said.
iHeart also estimated $100 million cash tax savings this year as a benefit from the CARES Act, as well as added savings from the suspension of its employee 401(k) matching program, as well as a hiring freeze and major reductions of consultant fees, and travel and other discretionary expenses.
“iHeartMedia believes that the major actions announced today — in combination with the company’s highly resilient capital structure — will substantially expand the company’s financial flexibility, provide sufficient liquidity to operate effectively even in an extended period of economic weakness, and position the company for a solid growth trajectory when advertising demand returns to normal levels,” iHeartMedia said.
