Giant radio broadcaster iHeartMedia said it’s targeting $250 million in cost reductions this year, including furloughs and pay cuts, to help it weather the economic fallout from the coronavirus pandemic.
“To provide visible and aligned leadership through this downturn, our senior management team and other employees voluntarily agreed to take meaningful reductions in compensation. We want our shareholders to know that we have taken immediate and proactive steps to weather this crisis,” said chairman-CEO Bob Pittman in a statement. He didn’t specify the extent of the cuts.
The company had already anticipated $50 million in savings related to a modernization initiative announced in February. It now expects 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.”
“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.
It also estimated $100 million cash tax savings this year as a benefit from the CARES Act.