St. Petersburg Times announces yearlong pay freeze for all staff, retirement incentive for staffers over age 50
The St. Petersburg Times announced this morning a yearlong pay freeze for its staff, along with an offer for "enhanced pension benefits" for staffers over age 50 with more than five years' service at the company. This was a long-rumored move, particularly after the slimming of the paper this month created an edition which requires fewer people to produce.
The goal, said Times editor, CEO and Chairman Paul Tash in a letter to staffers this morning, is to find "a graceful and humane way for the company to reduce its staffing levels." If the incentive offer doesn't produce enough cost savings -- Tash did not outline specific savings goals or staffing reductions -- the company may have to use layoffs to cut staff costs further.
The big question, which no local newspaper executive can answer yet, is whether the Tampa Bay market can still support two newspapers. And if not, which one will survive?
Already, the Times has reduced staff from 1,500 people two years ago to below 1,300 currently. Staffers have until July 28 to sign up for the program, and must retire by Aug. 31.
But Tash doesn't define the retirement incentives as a buyout. "A buyout is when you pay people not to work," said Tash, who has long opposed such programs. "This is just making it easier for people to retire if they choose." Unlike some buyout programs, any staffer who is determined to take the retirement incentive can do so -- staffers are encouraged to speak with department heads to figure out their own best strategy.
The incentives: An additional five years of age and service added when calculating a retire's pension. Health coverage is free until year's end. And staffers get a week's pay for each year of service, capped at 20 weeks.
The pay freeze begins Sunday; only staffers promoted to new jobs with expanded responsibilities will get pay raises, which must be approved personally by the company's top executives. Those who have already received pay raises this year will instead forego a raise in 2009. Tash also noted he has elected to reduce his pay by five percent while the pay freeze is in place, and that Times executives have had a pay freeze in effect since the start of 2008.
He said he hopes to know soon after the July deadline for taking the incentive whether involuntary job reductions will be necessary. "Weeks rather than months, I hope,"he said of the timeframe. "I know people are anxious."
"Some of you know my aversion to a general pay freeze, for example, though I have come to believe that circumstances require it," Tash writes today. "As difficult as these steps are, they also demonstrate our resolve to meet these challenges and surmount them."
Click below to read the full memo:
As you know, we are navigating a period of historic change and challenge. The new architecture of the daily Times – known internally as Project Flagship – is a major effort to adapt our efforts to the needs of our customers while reducing our expenses. I am extremely encouraged by the early reaction and results.
The new daily edition, in combination with other steps we have already taken, requires fewer people to produce it. Over the last few years, we have relied mostly on attrition – the routine departure of people to other jobs, other places or retirement – to reduce the size of our staff. Two years ago, the Times employed more than 1,500 fulltime staffers. Today, that figure stands below 1,300. Nevertheless, payroll and benefits remain our biggest single expense.
The recent changes to the daily Times provide the opportunity to further reduce staff levels, and this difficult economic climate demands that we move faster than the pace of normal attrition.
As a result, the company will offer a program of enhanced pension benefits for eligible staffers who sign up by July 28 and retire by Aug. 31. The Human Resources department will provide complete information about this program, with specific detail for staffers who are eligible: those at least 50 years old, with at least five years of service. Once this offer expires, the standard retirement benefits resume.
In my view, this voluntary program is a graceful and humane way for the company to reduce its staffing levels. I believe it will be attractive to many staffers, especially to some who may be considering retirement already. Depending on response, however, we may still need further reductions in our payroll costs, and that could include lay-offs. We would come to that result with reluctance, having taken other steps.
Those of us who remain Times staffers – and that will be the great majority of those on the staff today – will make our own contribution to the common good by giving up pay increases for one year. Starting this coming Sunday (June 1), there will be no raises except for staffers promoted to new jobs with bigger responsibilities, and those exceptions must be approved personally by Marty, Neil or me. Those who have already received raises this year will forego them in 2009.
In a time of rising prices for medical care, fuel and food, I understand that this pay freeze will cause hardship for some staffers. I deeply regret that reality, but as staffers, our economic security depends ultimately on the health of our company. For Times executives, a pay freeze has been in place since the beginning of this year. To honor my personal responsibilities, I have instructed the finance department to reduce my pay by five percent while this freeze is in place.
You would be right to see these actions as a measure of the challenges before us. Some of you know my aversion to a general pay freeze, for example, though I have come to believe that circumstances require it. And yet, as difficult as these steps are, they also demonstrate our resolve to meet these challenges and surmount them.
Getting through this stretch will not be easy, and it will take everyone’s best efforts, but I remain fully confident about our prospects. This is a great company, with a proud history and a strong voice in the Tampa Bay region. Thanks for your contributions to its future.