Three months after Cygnus slashed employee salaries in a drastic cost-cutting initiative, the company is restoring some of those that were cut.
In an internal memo sent to employees on New Year’s Eve, Cygnus co-CEOs Carr Davis and Tony O’Brien announced the restoration of some salaries that were slashed by 7.5 percent last fall. The restoration will be paid mid-January in the form of a special bonus payment, representing about 70 percent of the initial reduction. However, only salaried employees who are not eligible to receive commission, bonus or incentive payments will benefit from the restoration.
According to the memo, eligible employees will receive a bonus that equals 1.25 percent of their annual compensation, or roughly $560 on average. Cygnus executives who absorbed a larger salary cut-including O’Brien and Davis who saw a nearly 70 percent decrease-will not receive a bonus as part of this effort, according to Cygnus spokesperson Kathy Scott.
"Our employees work hard and [Davis and O’Brien] wanted to make sure they understand that they are very important to the company and that their work has not gone unnoticed," Scott says.
The dramatic pay cut was announced last October and was in response to greater-than-expected revenue shortfalls. "Recently we have begun to experience the decline in print revenue that has been affecting our industry for the last several years," Davis and O’Brien wrote in the memo announcing the cuts. "Because print represents more than 70 percent of the company’s revenue, the growth from other areas is not enough to cover our growing deficit."
The October cuts came on the heels of a restructuring in July which organized the company around five brand-director positions overseeing the company’s 15 market sectors, aimed at accelerating rapid growth, the company said.
In 2007, Cygnus’ print products took a significant hit, but other groups such as the expo division and interactive sales realized growth. Overall, the company grew 5.5 percent, Scott says.