The widely anticipated staff cuts at Clear Channel Communications were even a bit bigger than expected. The company laid off 1,850 people, or 9% of the total staff, across Clear Channel Radio, Clear Channel Outdoor and the corporate staff. Company CEO Mark Mays told the remaining employees (see his entire email below) that the cuts were necessary to “secure a strong future” for Clear Channel. In all, the company hopes to save $350 million in annual overhead.
As expected, the biggest cuts were in sales, with lesser performing AEs cut loose and top-billers expected to pick up the slack. Put there were also widespread cuts across programming and other areas.
“We have no room for low performers in either radio or outdoor. There is nowhere to hide for low performers and that includes programming,” Mays said through a company spokesperson. The company refused to comment, though, on how its business operations would be restructured with the lower headcount, saying that is a “competitive and strategic advantage” which won’t be discussed publicly. There has been speculation that stations will rely more on syndicated and voice tracked programming, but Clear Channel denies that there is any one-size-fits-all approach to how its stations are being programmed.
The cuts across all other segments of Clear Channel came less than two weeks after Katz Media Group, the radio and TV rep firm owned by Clear Channel, cut 8.5% of its workforce. It just took a little longer to figure out the broader cuts.
To justify the staff cuts to remaining employees, Mays supplied a chart showing even larger percentage cuts at other companies: 20% at Citigroup; 15% at Virgin Media; and 10% at American Express, Associated Press, Gannett and Yahoo!
RBR/TVBR observation: Good salespeople pay for themselves. Even mediocre salespeople keep the revenue flowing in when you are understaffed. We find it hard to fathom that fewer feet on the street will work to the advantage of Clear Channel, but then we’re not the private equity geniuses at Thomas H. Lee Partners and Bain Capital who paid $24 billion to buy the company.
Our biggest issue with Clear Channel at HQ is their consistent way of treating people as a number. The rumors for weeks of these massive cuts were coming and you would have thought for once a more humane way would have been implemented in conducting business.
But there is good news for the 1,850 people who got pink slips yesterday. Clear Channel-owned Inside Radio offered them free subscriptions to help with their job hunt.
Here is the email sent out by Mark Mays on Tuesday (1/20):
As I’ve mentioned previously, we are facing an unprecedented time of distress in the general economy – and the ripple effects have hit some of our largest customers hard.
Today, we had the unpleasant task of bringing our Outdoor and Radio businesses’ staffing in line with these challenging economic conditions. In doing so, we enter 2009 as a solid company and in the most competitive position possible.
We have thought carefully and at some length about the steps we need to take as a company to succeed during this unprecedented downturn. As a result, we have eliminated approximately 1,850 positions across Corporate, Outdoor and Radio. While a significant portion of these positions represent a realignment in our sales departments, the positions span all departments and represent approximately 9% of the total Clear Channel Communications workforce.
One of the things that has kept Clear Channel strong throughout our history is a willingness to deal with difficult situations in an immediate way – to make the tough decisions today in order to secure a strong future. It is this trait that has gone furthest in enabling us to weather many difficult downturns in our 37-year history. It always requires clarity, collaboration and courage.
Please know that these have been difficult decisions – yet necessary ones. We will miss those who are departing – even as we renew our shared commitment to success among all of us who will stay.
Everyone in our investor group, on the Board, and in the executive leadership team remains bullish about the long-term growth prospects for Clear Channel. We continue to believe that the Outdoor and Radio businesses offer excellent opportunities.
We need to remain highly entrepreneurial and innovative. We also need to remain focused and compassionate. If we continue to manage our business carefully, and invest with discipline in the right strategic opportunities, we will navigate this downturn effectively and emerge even stronger and better positioned when things improve.
Starting now, it is our ability to bring creative thinking to the current business climate – to focus on the benefits we deliver for customers – to show extreme focus and commitment – that will create results.
Clear Channel Communications has more resources than any of our peers. The tools are here. The support is here. It’s time to use them to create lasting competitive advantage for our customers – and for our company.
Please know that we continue to be extraordinarily appreciative of all of the passion and hard work that each of you continues to commit to this phenomenal business. We will get through this together.
We’re in this together. We have the best team. And we all have important work to do.
As we head into the New Year, I know we will meet the oncoming challenges with focus, determination and grace.
Please let me or your management team know if you have any questions.