Coronavirus has caused much of the world to come to a standstill and companies are having to cut costs big time.
This week we heard how Live Nation are having to cut out $500 million in costs to keep themselves stable over the coming months. Their CEO and President is valiantly taking a 100% pay cut but they will have to do a lot more to keep their business, which revolves around the currently dead live industry, afloat.
We’re now hearing that iHeartMedia are having to find savings of half that amount, which is still a huge $250 million. They plan to furlough staff and reduce the salaries of their top executives to help reach this goal. They will also be freezing new hires to the team and spending on marketing.
Thankfully in February the company set out their new ‘Modernization initiatives’ which they hope will lead to $50 million in savings throughout the year. Unfortunately those savings also resulted in the laying off of many employees including DJs who were sacked in favour of AI-powered curation.
Last year iHeartMedia reported a massive $3.18 billion in operating expenses which was just offset by revenues of $3.68 billion. With their plans to cut a quarter of a billion their COO and CFO Rich Bressler says they will only be able to “partially” offset their expected losses for the year.
They have outlined their primary plans for savings in 4 bullet points:
- Reductions in compensation for senior management and other employees;
- Furloughing of certain employees that are non-essential at this time;
- Suspension of new employee hiring, travel and entertainment expenses and 401(k) matching program;
- Major reduction of consultant fees and other discretionary expenses