BNP to Cut Employee Salaries 25 Percent
Internal memo: Banks are 'forcing near unattainable terms.'
Five and 10 percent salary cuts have become near-commonplace for magazine publishers in 2009, but this week employees at BNP Media learned the company will cut staff salaries by 25 percent.
The pay cut is effective May 1.
In an internal memo obtained by FOLIO:, BNP co-CEOs Harper, Mitchell and Taggert Henderson said banks are ‚Äúforcing near unattainable terms on companies such as ours, considering the fact that there has been such a severe downturn in the economy.‚ÄĚ
‚ÄúWhile we (the Henderson family) are certainly partially to blame for having taken on such a high amount of risk, were it not for their demands, we would be able to just pay them and move on,‚ÄĚ the memo reads. ‚ÄúBut, beyond just paying them (which we are doing and can continue to do) they require we meet certain financial covenants; these are what are causing us such serious problems. This unfortunate set of circumstances has forced us to make cuts that none of us could have ever imagined.‚ÄĚ
Concurrently, BNP is also adopting a four-day workweek for the summer. (Employees will be paid for each Friday during that span, albeit at the reduced level.)
Harper Henderson says there is no set timeframe for re-instituting salaries. ‚ÄúThe term we‚Äôre hearing in all sectors is ‚Äėsurvival,‚Äô‚ÄĚ he told FOLIO:. ‚ÄúWe need to survive until this economy can turn around and everyone can get back on their feet and back to business as usual. I don‚Äôt see any threat to publishing or long-term damage to what we do in terms of magazines or Web sites or shows, but this some sort of strange, perfect storm that‚Äôs been ongoing.
‚ÄúWe want to make it to the other end and make sure we have as many employees as we possibly can on the other end,‚ÄĚ he continued. ‚ÄúI‚Äôm hearing this is the bottom and I‚Äôm hearing good things about 2010. If that‚Äôs the case, we‚Äôll start seeing things improve in all areas.‚ÄĚ
BNP publishes more than 40 titles, including Sustainable Facility and Appliance Design. In 2007, BNP acquired Ascend Media‚Äôs Professional Services Division, which included 17 magazines in the food, beverage and packaging space, for an estimated $30 million.