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Beyond furloughs: KARE socked with pay cuts

It just keeps getting worse at KARE11: today, employees learned they must swallow 4-6 percent pay cuts beginning July 1.

The news comes a week after four employees, including senior executive producer Lonnie Hartley, were let go, in a year when most workers have already been forced to take two furloughed weeks. The furloughs amounts to a 4 percent cut; combined with today's outright slashing, any non-contract employee making $50,000 or more will absorb a 10 percent hit.

The cuts are scaled; workers making less than $30,000 are unaffected; those in the $30,000s will see a 4 percent cut, and those in the $40,000s will lose 5 percent.

KARE's owner, Gannett Co., appears in a free-fall — just yesterday, the website Deal.com published a detailed explanation of why the will be lucky to survive two years. (Short version: Thanks to credit default swaps, bondholders will earn more if Gannett fails than if it pays them back. Strib vets will be interested to know former owner McClatchy Co. faces the same problem.)

However, Gannett broadcast division president David Lougee brags in his pay cut memo that "our division’s financial results continue to be at the top of the industry." (That ought to make everyone feel better.) Still, Lougee asserts, the American economy is being reset and employee pay must be also.

The cuts don't affect high-profile anchors and reporters with contracts, though Lougee stated in a fact sheet, "it’s important to note that most contracted employees have already taken salary reductions, some of those voluntarily.  Many of those reductions have been at much higher rates than being implemented here."

Here's the memo:

From David Lougee, pres of broadcast division
June 23, 2009
 
Dear colleague,
 
While many are cautiously optimistic that the worst of this economic downturn will soon be over, the broadcast industry continues to feel the effects. The decline in the auto industry alone — once about 30 percent of our division’s ad business — is a major challenge for us. And that’s just one example of the changes we are seeing.
 
I believe it’s clear there will be a permanent reset of the American economy on the other side of the economic storm. On top of that, our industry has been impacted by the revolution in the way people consume media and the way advertisers try to reach them.
 
Even so, our division’s financial results continue to be at the top of the industry.  With your help, ideas, and some tough choices, we have made important and innovative strides in how we allocate resources to best serve our viewers, communities and advertisers, on any and all platforms.
 
These efforts, combined with some proactive financial decisions, will help us stay strong. In effect, we have to have our own “reset” to match the changes in the broadcasting business. As a result, we are making the following changes in compensation for employees making $30,000 or more in order to reduce costs and minimize the need for additional job-related actions in the future.
 
Effective July 1, for:
  
• Employees making $30,000 to $39,999, compensation is reduced 4%.
• Employees making $40,000 to $49,999, compensation is reduced 5%.
• Employees making $50,000 and higher, compensation is reduced 6%.
 
The salary reduction will be calculated from your base annual salary. More details are included in the attached fact sheet. Again, employees making less than $30,000 are not affected.
 
I want to thank you for the sacrifices you are making, and for the support you’ve provided each other during these difficult  times  I encourage you to talk with your managers about this change, and please feel free to contact me to discuss this or any other issues of importance to you.

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Comments (2)

"The cuts don't affect high-profile anchors and reporters with contracts..."

Of course not! Why would anyone bother affecting the "talent" when eliminating their salaries alone could save 10-20 jobs? I understand they are under contract, but contracts don't need to be renewed.

And I use the word "talent" very loosely for the anchors, who are simply overpaid mouthpieces for the excellent writing and work of the production crew.

Just another example of poor management at KARE11 and Gannett.

Adam:
Gannett is not to blame for these cuts. As a former Gannett employee in Phoenix, staffers are treated very well. Broadcasting is suffering nationwide. Here in Salt Lake City, two stations have laid off their main news anchors, and the rest of the stations have had layoffs and mandatory furloughs. The broadcasting websites indicate that stations nationwide will be returning to only one news anchor on most newscasts. I commend Gannett for not slashing the salaries of those making less than $30,000.