People magazine's publisher joins growing list of media companies slashing pay as ads slump

Key Points
  • Meredith is temporarily cutting pay for about 60% of its employees as advertising slumps.
  • Meredith also said it is suspending its dividend and withdrawing its fiscal 2020 forecast.
  • Meredith owns more than 20 magazines and 17 U.S. television stations

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Blake Shelton named People's Sexiest Man of the Year.
Source: People

The owner of magazines including "People" and "Entertainment Weekly" said Monday it is cutting pay for about 60% of its staff until Sept. 4 because of a slump in advertising revenue due to coronavirus quarantines.

Meredith Corp. said about 2,000 employees will receive a temporary 15% cut in salary, and 750 employees, including Meredith's highest paid executives, will take pay cuts ranging from 20% to 40%. The remaining 2,250 employees won't receive a pay reduction.

Employees taking a pay cut will also begin working four-day weeks from May 4 to Sept. 4, the company said.

In addition, Meredith said it is instituting a hiring and wage freeze and a "significant" reduction in using freelance writers for its magazines. The company also said it is withdrawing its fiscal 2020 performance expectations last communicated in February and is suspending its dividend. Meredith said it will reassess  the moves in late summer once it has a better read on a recovery.

Meredith is the largest U.S. magazine operator, owning more than 20 newsstand and subscription titles including lifestyle publications such as "Better Homes & Gardens" and "InStyle." It also owns 17 local television stations reaching about 30 million U.S. viewers.

Print and digital media companies have been contracting and cutting salaries as companies across the globe look to save money on expenses such as advertising. About half of Meredith's total revenue comes from advertising. The New York Times estimated last week about 33,000 employees of U.S. news media companies have been laid off, furloughed or had their pay reduced in recent weeks. Companies such as Buzzfeed and Vox have also announced pay cuts in the past few weeks. 

Watch: Expect job cuts as revenues fall amid virus crisis, says business leaders survey

Expect job cuts as revenues fall amid virus crisis, says business leaders survey