KCBS parent plans to layoff 5% of its workforce, threatened delisting for stock price <$1/share at closing
After revenue growth slowed in the second quarter with future expectations murky due to macroeconomic challenges, Audacy CEO David Field warned that the nation’s second-largest radio station owner would institute expense cuts — and the Philadelphia-based company has started that process by enacting layoffs.
A source told the Philadelphia Business Journal on Tuesday that job cuts are indeed underway and will impact all divisions and geographic markets, with less than 5% of the workforce affected and no more layoffs expected for the remainder of this year.
To put that into perspective, Audacy (NYSE: AUD) has more than 5,000 employees spread across 50 U.S. markets. So that means the layoffs will not exceed 250 employees across the country.
In the market covering the San Francisco Bay Area, Audacy operates six radio channels: news and sports channels KCBS and 95.7 The Game as well as music channels Channel Q (adult contemporary), 105.3 Dave FM (adult hits), 102 James (classic hip hop) and Alice @ 97.3 (pop).
In a statement, an Audacy spokesman said that over the past few years the company has undergone a "transformation journey" that included growth through acquisitions, platform enhancements, and the addition of hundreds of employees.
"We remain committed to this exciting transformation which has made us a much stronger organization, but in light of current macroeconomic headwinds, like so many other companies, we have been proactively taking actions to mitigate against the impact of any downturn," the spokesman said. "These include evaluating budgets, reducing expenses, and also reducing our workforce."
Radio Insight first reported the news that personnel cuts began Tuesday in markets such as Dallas and Baltimore, where on-air personalities have announced that they had been let go. It was not immediately clear how the Bay Area stations would be affected by the layoffs.
During the company’s second quarter earnings call earlier this month, Field noted that Audacy was looking to cut expenses by “working to enact substantial sustainable savings through a number of measures to improve margins and profitability across the business. We believe we will be able to deliver meaningful cost reductions without hindering our strategic priorities and growth plans.”
Chief Financial Officer Rich Schmaeling told analysts on the call that expenses grew in the first quarter by 8% year over year and 6% in the second quarter. He said the company has given guidance that third quarter expenses will be up 1% to 2% — calling that “substantial progress.” He said some of that will be reached by cutting back on planned spending on marketing.
“We are working on a program to meaningfully reduce our expenses and we will provide further details about the scope and extent of those actions on our third quarter call,” Schmaeling said.