16 Staffers Leaving KCRW In Buyouts

[TheBigA]

This is pure private-sector corporate financial mismanagement and corporate greed (yes, even in "non-profits").

The people at KCRW aren't being laid off. They're being bought out. They are voluntary buy-outs. They're being offered a large amount of money to leave. It's all voluntary and they can turn it down. But usually it's a one-time offer:

With layoffs looming, you could be offered a voluntary buyoutâ4 things to know before taking one

Buyouts are a way to incentivize employees to leave a company in order to reduce wage expenses and bring down costs.

www.cnbc.com

 

[Mikey Radio]

The people at KCRW aren't being laid off. They're being bought out. They are voluntary buy-outs. They're being offered a large amount of money to leave. It's all voluntary and they can turn it down. But usually it's a one-time offer:

Exactly. I've had a number of friends and acquaintances who worked in a whole host of industries from blue-collar jobs to healthcare to education be offered buyouts or early retirement. This is nothing new or terribly unique and it doesn't necessarily point to greed or mismanagement. Most were over 55 so somewhat near retirement anyway, and the offers that were made to them were very attractive financially. In some cases they jumped at the chance, took the buyout, retired early and then they could consider employment elsewhere if they wished to. In other cases they wanted to continue working so they turned down the offer and stayed in their jobs. No harm, no foul either way and they generally felt no pressure to make a decision one way or the other.

 

[Mark Roberts]

Exactly. I've had a number of friends and acquaintances who worked in a whole host of industries from blue-collar jobs to healthcare to education be offered buyouts or early retirement. This is nothing new or terribly unique and it doesn't necessarily point to greed or mismanagement. Most were over 55 so somewhat near retirement anyway, and the offers that were made to them were very attractive financially. In some cases they jumped at the chance, took the buyout, retired early and then they could consider employment elsewhere if they wished to. In other cases they wanted to continue working so they turned down the offer and stayed in their jobs. No harm, no foul either way and they generally felt no pressure to make a decision one way or the other.

That said, some companies are reluctant to offer buyouts because, the thinking goes, the people most likely to take the buyouts are the ones who you want to stick around. I don't know of any studies that prove or disprove this line of thinking - no doubt there's been something in the HBR at some point - but it's there. Layoffs can allow a company to deal with performance issues without an admission of doing that (some will admit it) and without triggering all sorts of HR processes. On the other hand, it doesn't exactly help the self-esteem of an employee who's been laid off, since they'll be left wondering what it is they did or didn't do.

Buyout offers often are targeted to employees with certain levels of tenure. I have seen situations where there is implicit or at least perceived pressure to take them, usually in companies that are going through a rough patch. The rule, at least in California, was that the position eliminated, either in a layoff or a buyout, could not be re-opened for at least a year after layoff.

 

[Mikey Radio]

That said, some companies are reluctant to offer buyouts because, the thinking goes, the people most likely to take the buyouts are the ones who you want to stick around. I don't know of any studies that prove or disprove this line of thinking - no doubt there's been something in the HBR at some point - but it's there. Layoffs can allow a company to deal with performance issues without an admission of doing that (some will admit it) and without triggering all sorts of HR processes. On the other hand, it doesn't exactly help the self-esteem of an employee who's been laid off, since they'll be left wondering what it is they did or didn't do.

Buyout offers often are targeted to employees with certain levels of tenure. I have seen situations where there is implicit or at least perceived pressure to take them, usually in companies that are going through a rough patch. The rule, at least in California, was that the position eliminated, either in a layoff or a buyout, could not be re-opened for at least a year after layoff.

I think every situation is different. In some cases if they're just talking about a position where there are several people doing the same task and those with the most experience aren't necessarily any more or less qualified but they're getting paid more, it may be to the company's benefit to offer the buyout to those who are longest-tenured and thus, most probably earning a higher salary. In some other situations, as you allude to, it may be best to try and keep the most qualified and experienced workers. In yet others, younger workers might be more nimble, energetic and better able to multi-task, making them more attractive depending on the situation.

I've also worked at large corporations where they came to each department head and gave them a $$ number they had to hit when making staff reductions and allowed them to choose how to do it. Some chose to keep most all the "worker bees" and cut management positions that were making more $$. Others chose to keep the managers who were "loyal" to them, and cut entry level positions with the idea that their managers would need to work harder and take on more tasks until the company got to a place where they could hire in or contract more entry-level folks again in the future. Again, each case is sometimes different.

 

[DavidEduardo]

This is getting a little too far away from radio and broadcasting. Let's keep the discussion focused on that.

 

[Robert Douglas]

I have a contrarian perspective. Entrepreneurs such as Gates or Bezos or even Musk take enormous risks and, when successful, give tens of thousands of jobs and stimulate the economy. Were there no incentives for personal gain, nobody would take the risks that have resulted in enterprises that benefit the economy.

The same, of course, applied to the few independent broadcasters who, in the 1960's, took the failed FM band and put their careers and money on the line to build stations. I'm talking about Jerry Lee and Saul Levine and Art Kellar and a number of others who took the risks in our industry that ended up turning FM radio around after nearly two decades of failure.

"Owners" of big companies do not have a huge pile of cash; some are investment rich and cash poor. Their "wealth" is concentrated in shareholdings which are not liquid. And that applies to station owners, big and small who have fixed expenses but who are dependent on the uncertainties of the economy and the advertising market.

And if you look at expensive cars, homes, yachts and planes, every purchase like that produces revenue for the suppliers who in turn give employment to many.

But the subject here is radio, not yachts. And when there are cases like Entercom/Audacy that end in failure, all that does is show how considerable the risks are in creating a business. As a former station owner myself, the risks and responsibility are a huge burden. What I learned in station ownership was to give great respect to the entrepreneurs and investors who keep private enterprises advancing, innovating and prospering.

Thanks David for jumping in and clearly defining what most American broadcasters, of any size, feel with all their hearts.