See the third page of this post for more information on the coming Register furloughs, layoffs, and buyouts…
ORIGINAL POST, JUNE 3, 10:24 A.M.: The wheels are coming off Aaron Kushner's grand experiment with the Orange County Register–and fast. On Friday, the Orange County Business Journal broke the story that Kushner's Long Beach Register daily would turn into a weekly. Today, we can report the cuts are even more severe: mandatory two-week furloughs effective immediately through June and July at the OC Register, layoffs in the sales department (called a "restructuring"), and the offering of voluntary severance packages to reporters.
"Doing so will not be easy and will impact all of us, but it is necessary to ensure a strong and healthy future for our newspapers," Kushner wrote in a companywide email obtained by the Weekly. "Critics will try to say that we have failed. To the contrary, the failure would be if we did not try at all, or if in our measured success we did not adapt so that we could continue to invest in our growth."
More–much more–as this story develops…and remember, Register employees: anonymity guaranteed. Bring on those tips!
1ST UPDATE, JUNE 3, 1:49 P.M. The Weekly just obtained a memo sent out to its reporters today that's Kushner manifested: patronizing, demoralizing, smarmy, and just overall weak-sauce.
Among the highlights:
*An explanation that furloughs are sometimes called "unpaid leave or time off without pay." Um, DUH…
*A justification that furloughs "provides the immediate savings benefit we were seeking"–you know, before the axe falls again.
*Kushner claims that sales are up–but expenses are through the roof. Hence, the layoffs.
*During the furlough, reporters are barred from checking their work email, phones, notes–everything.
*To make it up to everyone, Kushner will provide "counseling, local community resources and financial counseling." Just buy everyone off with Maker's Mark…and now, the memo!
Freedom Communications Furlough Program
Q: What is a furlough?
A: A furlough is time that an associate does not work and does not get paid for that time away from work. It is sometimes called unpaid leave or time off without pay.
Q: Why has Freedom decided to do a furlough?
A: We are continually evaluating how we can maximize growth based on what is working well, and making necessary adjustments when needed. A furlough was one of many options considered that provides the immediate savings benefit we were seeking, while ensuring there is minimal disruption on delivering our valuable products and services to our customers and advertisers.
Q: Is everyone going to participate in the furlough?
A: All levels of associates across all organizations will participate in a ten (10) day furlough program during the months of June and July, 2014. We are choosing to exempt selected associates in selected roles to ensure that the delivery of our products is not interrupted.
Q: Does this mean the Company is in really bad shape?
A: No. We've made a bold investment in the future of newspapers, quality newspapering, growing value for our subscribers and advertisers and aggressively expanding the geography and depth of value we provide to our community. We committed that we were going to put everything we had into proving that newspapers have a vibrant and growing future. Overall revenue from our three core areas of business – subscriptions, advertising and commercial printing – have grown within the past two years. Despite this progress, our company's expenses have outpaced the growth of its revenues. As we learn from our investments and align our cost structure in the short term with what we now know we can achieve in revenue growth, it better positions us for permanent and long-term profitability.
Q: I am an exempt associate, how will the furlough process work for me?
A: As an exempt associate, you are considered to be paid on a weekly basis under the rules set by the Department of Labor. Therefore, you will be required to take your ten-day furlough in two full payroll weeks within the designated calendar period. During a furlough week you will not be allowed to do any work, which means no work-related calls, emails or site visits. To record your time, you will enter 40 hours of VTO (unpaid time) in the ADP e-time application much like you would enter vacation or sick time.
NOTE: Days must be taken as consecutive days based on your regular work schedule. If your normal work days are Monday-Friday then your furlough days will be a Monday- Friday. If your normal workdays are Wednesday through Sunday, then your furlough will occur on Wednesday through Sunday. Each week of the two weeks does not need to be consecutive. For the exact scheduling of your weeks, please speak with your manager.
Q: I am non-exempt, how will the furlough process work for me?
A: As a non-exempt associate you are covered by the Fair Labor Standards Act. You are therefore paid by the hour. You will be allowed to take your ten-day furlough in one day increments. During that time, you will not be allowed to do any work, which means no work-related calls, emails or site visits. To record your time, you will enter 8 hours of VTO (unpaid time) in the ADP e-time application for each day of furlough. Your furlough days do not need to be consecutive. For the exact scheduling of your days, please speak with your manager.
Q: Why are the rules different for non-exempt and exempt associates?
A: Non-exempt (hourly) associates and exempt associates are subject to different rules set by the US Department of Labor. The pay rules dictate how we are able to pay or not pay during the furlough period. If you are not sure what category you fall into, please consult your HR support manager.
Q: Why can't I do any work while I am out?
A: There are very specific state and federal wage and hour rules that must be followed. These laws require that associates, whether non-exempt (hourly) or exempt, must not work while on an unpaid leave. That includes reading or responding to work-related e-mails, calling or responding to calls from colleagues or customers and being on-site or at a customer's location at any time during your furlough days.
Q: This is a financial hardship for me, can there be an exception for me?
A: There will be no individual hardship exceptions. We encourage all associates to make use of resources such as the Employee Assistance Program to receive counseling or financial advice.
Q: May non-exempt associates take furlough time in part day or hourly
A: Furloughs must be taken in full day units.
Q: If an exempt associate works while on furlough because of an emergency can they take a new furlough week later?
A: Every exempt associate will need to complete the furlough in full payroll weeks. It is important to schedule your furlough carefully with your manager so that back-up is available. If that is not possible, the furlough will need to be undone and re-scheduled (please contact the payroll department for instructions for corrections in the ADP e-time application).
Q: Does the furlough include part-time associates?
A: Yes, the furlough should be based on your scheduled or variable work time and should be two week's worth of normally scheduled time. For example, if you work 20 hours per week, then your furlough will be for 40 hours.
Q: How will my furlough be scheduled?
A: Your manager will work with you to schedule your furlough to provide the least impact to our normal business operations.
Q: Will this compromise our ability to do our jobs, produce our products and satisfy our customers?
A: We continue to evaluate all of our actions for impact on our customers. We feel that, although this will impact many areas due to the scheduling challenges, this does provide more flexibility for our business as we align our cost structure with our revenue growth.
Q: Who will cover my job while I am out?
A: You and your supervisor will discuss how your responsibilities will be handled while you are out. If you have a company e-mail address or phone mailbox, you should leave a message directing people to the associate designated to reply in your absence.
Q: What happens to my benefits while I am on furlough?
A: Your benefits including medical, dental, vision, life and disability coverage will continue during your furlough. The deductions for your coverage will be taken from your paycheck as they are in a non-furlough period. You will continue to earn vacation credit during your furlough. If you participate in the Freedom Communications 401(k) Retirement Plan, no participant contributions will be made during your unpaid furlough.
Q: Can I take vacation instead?
A: No. The savings comes from unpaid time. Vacation is paid time.
Q: Can I take furlough time during the week of June 30th which includes the July 4th holiday? If I do will I receive holiday pay?
A: If you are an exempt associate and you choose to take off the week of June 30th which includes the 4th of July you will not be paid for the holiday. If you are an hourly associate you may choose to use the holiday as one of your furlough days which means you will take that day as unpaid time.
Q: If I have a garnishment, will it be impacted by the furlough?
A: No, garnishments will continue to be taken during the furlough.
Q: Am I eligible for state unemployment benefits while I am out on furlough?
A: Unemployment insurance claims are adjudicated by the State of California, Economic Development Department [EDD]. Inquires about unemployment insurance should be directed to the EDD.
Q: What other resources do I have to assist me while I am out on furlough?
A: Your Employee Assistance program can provide counseling, local community resources and financial counseling. They can be reached at 866.799.2728 or http://www.healthadvocate.com.
UPDATE, JUNE 4, 7:45: And since you're all the way at the bottom of this page, let's start a new one, shall we? After the jump!
Sources tell the Weekly that at 9 a.m. this Monday, there will be blood in the OC Register newsroom. That's when Kushner will announce how many people have taken his buyout offer, and figure out how many people he needs to lay off.
And that number? Anywhere from 20 to 100, depending on who takes the buyouts. In other words, Kushner is making a ruthless threat to the future of journalism at his paper: if enough high-priced veterans with institutional knowledge take buyouts–leaving the paper to just-out-of-college, underpaid cub reporters with no knowledge of OC–the layoffs won't be so severe. But if the vets don't take buyouts, all those young reporters Kushner mesmerized with tales of a new era in print get the boot–and he ensures that the paper will never attract young talent again.
How bad is it at the Reg right now? "The major red flag here is the immediate furloughs," a media analyst told the Los Angeles Times. "It screams out: We don't have enough cash to make payroll."
Reporters Ricardo Lopez and Pulitzer Prize-winning Stuart Pfeifer also revealed that the Register will reduce news pages by 25 percent, in part by cutting back the business section from daily to five days a week, and by eliminating a standalone fashion section. And they included a fascinating stat: according to the story, Kushner added about 175 staffers to the Reg during his grand experiment. If we worst-case-scenario what's coming Monday and Kushner eliminates 100 positions, it puts the Register at fewer reporters than when he took over two years ago. According to Kushner's stenographer, Mary Ann Milbourn, the Reg newsroom is currently at 345, down from a high of 370 at the beginning of the year; when he bought the paper, it was at 198. Lay off 100 on Monday, subtract the reporters he stole from Grand Street to staff his Los Angeles Register–"more than 50" is all he's admitted to–throw in the 30 reporters Kushner laid off back in January, and we're back to square one.
And so the countdown begins for Monday…