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In a move to reduce the economic impact of the COVID-19 pandemic on its business, iHeartMedia said Tuesday that it is requiring employees who earn more than $50,000 a year in base pay to take two weeks of unpaid vacation in calendar year 2020. The company says the two unpaid vacation weeks are the equivalent of a roughly 4% salary reduction for the year.

The mandate doesn’t apply to employees who have already volunteered to take a salary reduction of 5% or more.

In a memo to employees Tuesday afternoon, Chairman and CEO Bob Pittman and President, COO and CFO Rich Bressler said the “tough decision” was made to reduce the pandemic's financial impact on the company while avoiding layoffs.

“Unfortunately, the longer than anticipated shutdown of businesses means that we must do more, with the goal of keeping our business healthy while still avoiding permanent layoffs,” the memo said.

In addition, the two execs said they had hoped business would have returned sooner and that the company would have been able to confine financial sacrifices to its senior management ranks and those who voluntarily agreed to compensation reductions.

Following is the full text of the memo:

Team,

We’re sure you have seen news stories about states’ extended stay-at-home orders and questions about the continuing impact of COVID-19 on businesses across the country, and that includes our business as well. We’ve had to make some difficult decisions which you’re aware of to address the economic impact on our company, and we have done our best to find ways to reduce that impact while avoiding layoffs.

Unfortunately, the longer than anticipated shutdown of businesses means that we must do more, with the goal of keeping our business healthy while still avoiding permanent layoffs.

Therefore, after reviewing all of our options, we are taking a difficult step but one that we hope will be our last action impacting employee compensation: Requiring that employees who make over $50,000 a year in base compensation – excluding bonuses, overtime or commissions -- and who have not already volunteered to take a salary reduction of 5% or more, to take two weeks of unpaid vacation in calendar year 2020, with the first vacation week taking place between now and June 30 and the second vacation week taking place between July 1 and September 30. These two unpaid vacation weeks in total are the equivalent of an approximately 4% salary reduction for the year and must be scheduled with your manager to ensure appropriate staffing at all times.

Please know we did not make this decision lightly. And it was a tough decision; we had hoped that business would return sooner, and we had also wanted to contain the financial sacrifice to the senior management ranks and those who voluntarily joined us in compensation reductions.

We look forward to, and hope for, an upturn in our critical advertising revenue as businesses begin to gradually return.

Finally, we want you to know how much we value and appreciate how well you’ve adjusted to our temporary work-from-home environment and the contributions you are making to help our company, our communities and our colleagues through these tough times.

Thanks.

Bob and Rich