Mirror publisher to furlough almost 1,000 employees and cut pay
The publisher of the Daily Mirror, Daily Express and Daily Star newspapers is to furlough almost 1,000 employees, and its management, including the senior editorial team, will have pay slashed by a fifth.
Reach, formerly known as Trinity Mirror, also owns hundreds of regional titles including the Manchester Evening News, as well as the Scottish Daily Record and the celebrity magazine OK!
The company said it intended to furlough 20% of its 4,700 staff – 940 – during the coronavirus crisis. Reach’s top management, including the “most senior editorial team”, headed by the group editor-in-chief, Lloyd Embley, will take a 20% pay cut and all other employees will have their pay cut by 10%.
The company has also suspended bonuses this year, scrapped the dividend and will no longer be publishing financial guidance.
Income subsidies
Direct cash grants for self-employed people, worth 80% of average profits, up to £2,500 a month. There are similar wage subsidies for employees.
Loan guarantees for business
Government to back £330bn of loans to support businesses through a Bank of England scheme for big firms. There are loans of up to £5m with no interest for six months for smaller companies.
Business rates
Taxes levied on commercial premises will be abolished this year for all retailers, leisure outlets and hospitality sector firms.
Cash grants
Britain’s smallest 700,000 businesses eligible for cash grants of £10,000. Small retailers, leisure and hospitality firms can get bigger grants of £25,000.
Benefits
Government to increase value of universal credit and tax credits by £1,000 a year, as well as widening eligibility for these benefits.
Sick pay
Statutory sick pay to be made available from day one, rather than day four, of absence from work, although ministers have been criticised for not increasing the level of sick pay above £94.25 a week. Small firms can claim for state refunds on sick pay bills.
Other
Local authorities to get a £500m hardship fund to provide people with council tax payment relief.
Mortgage and rental holidays available for up to three months.
In addition, the board has “requested discussions” to defer payments due to the pension fund. A spokesman for the company said Reach paid £4.1m a month relating to the pension fund. According to the latest annual report for 2019, Reach had a pension deficit of £295.9m and made £48.9m in payments.
“The board has agreed that all stakeholder groups should be asked to contribute to ensuring the company is in as strong a position as it can be and as a result the company has requested discussions around a deferment of current contributions to all the group pension funds,” the company said.
While the company has said that everyone must play their part, Jim Mullen, the chief executive, and Simon Fuller, the chief financial officer, were paid almost £300,000 in bonuses for 2019 at the end of last month.
In addition, late last month the pair were given shares worth £1.18m on the day of the award relating to the company’s long-term incentive scheme, which will vest in three years.
A number of British publishers including the London financial freesheet City AM and JPI Media, the owner of the Scotsman and the Yorkshire Post, have suspended printing some titles.
Reach said all of its print and digital publications “continue to be produced without interruption”.
“All of our key national and regional publications will continue to operate at this vital time despite these measures and we have sought to spread the burden of these actions across all stakeholder groups,” the company said.
Mullen said: “It remains difficult to predict the duration and long-term impact of the crisis on our sector, so it is key we take proactive measures now on cost to protect jobs and the Reach business for the long term.”
The company has £20m in cash and a £65m revolving credit facility it can utilise.
DMGT, the publisher of the Daily Mail, Mail on Sunday, Mail Online, the i and Metro, has taken a different, innovative approach to avoid furloughing staff or making redundancies.
The company, which has 2,400 staff working in its publishing arm, has asked employees to take a temporary pay cut in return for shares in the company.
The scheme will see staff on salaries above £40,000 take a graduated pay cut, ranging from 1% to 26%. Staff will receive a proportionate number of DMGT shares each month until the crisis is over. At the end of the year they will be able to cash in the shares, and if the share price has dropped the company will make up the difference, or they can hold on to the shares as an investment. Those earning less than £40,000 can also participate in the scheme of they choose.
“You will not have lost a penny,” said Jonathan Harmsworth (Lord Rothermere), who chairs and controls DMGT, in an email to staff on Monday. “Many news organisations are being forced to furlough staff and introduce redundancies. We have striven hard to come up with a plan that allows us to avoid these actions.”
