NPR's budget cuts memo *

National Public Radio stations were just sent this memo about the cutbacks disclosed today, including the cancellations of "Day to Day" and "News & Notes" that LAO has been reporting and the firing of 64 staffers, among them Los Angeles-based entertainment biz reporter Kim Masters. "Neither program was attracting sufficient levels of audience or national underwriting necessary to sustain continued production under these tough financial circumstances," says the memo. In addition, 21 open jobs won't be filled and other cuts will be made.

[* A separate Q-&-A says about half of the terminated positions are for journalists, and that NPR West will stay open with about 30 people and remain an integral part of the network's national coverage.]

Fr: Dennis Haarsager, Interim President and CEO
Re: Important NPR Budget Announcement

Over the past few months, we have all witnessed the deterioration of the national economy. NPR is not immune to this severe downturn, and our revenue sources will be affected. A sharp drop in our current and projected corporate underwriting has compelled us to reduce expenses immediately. This memo describes our plan to ensure that NPR will weather this economic crisis.

NPRís Financial Environment

In late spring, we began to see a decrease in NPR corporate sponsorship, which makes up nearly a third of our operating budget. While we made budget cuts at that time and continued to do so as the economy faltered, all our revenue sources are under pressure. Corporate sponsorship has decreased even more sharply since mid-September. All industries, including the financial, automotive, and media industries, historically our biggest underwriters, are cutting back significantly. Additionally, the philanthropic foundations and major donors who support NPR are cautiously watching the economy and their future giving is uncertain. These are no doubt trends that you are seeing at your own stations, as the forces affecting NPR are being felt throughout public radio.

The manageable $2 million budget deficit we projected in July for Fiscal Year 2009 has now risen to $23 million.

It is clear that this serious financial situation canít be responsibly resolved through short-term or temporary cuts. Rather, we must t ake measures that provide long-term savings, and that preserve our effectiveness and our ability to generate vital income in the years ahead.

NPRís Budget Reduction Plan

Today, we are announcing the cancellation of News & Notes and Day to Day, and significant budget reductions across the organization. These cuts include the elimination of 64 filled and 21 unfilled positions, many of which are associated with the two cancelled programs. Positions have also been eliminated across NPR, including reporting, editorial, and production staffs; station services; digital media; research; communications; and administrative support. Overall, this is a 7% reduction in NPRís current workforce.

It is important for you to understand why we chose to cancel News & Notes and Day to Day, and the implications for programming strategy and commitments. Neither program was attracting sufficient levels of audience or national underwriting necessary to sustain continued production under these tough financial circumstances.

Given the publicity that surrounded the bequest from Joan B. Kroc in 2003, it is understandable to wonder why NPR doesnít draw on it at this time. Legal restrictions severely limit expenditure of the NPR endowment, which includes most of the bequest made by Mrs. Kroc.

Fortunately, even though the endowment lost value and did not generate earnings for this year, the NPR Foundation was able to fund a separate $10 million distribution against what NPR had budgeted for FY 2009. The NPR Board also authorized us to access up to $15 million from the NPR operating reserves, allowing us to cope with the immediate situation and limit the depth of the cuts to staff and programs.

In November, we sent a memo to all staff relaying our need to address growing budget concerns. In return, we received thoughtful budget suggestions from staff members across the organization. We reviewed them all, and investigated options such as furloughs and fringe benefit reductions. In the end, we concluded that it was necessary to eliminate some activities completely to achieve the long-term savings we require while protecting our core mission.

Laying off valued colleagues was a difficult decision and the last thing we wanted to do. These cuts are based on the nature of positions, not a judgment of the contributions of those who are losing their jobs. We are losing talented and hardworking staff. The cut s are a reflection of the difficult economic times we are being forced to confront.

Our staff reductions include cuts in On-Air Fundraising and Promotion, Station Underwriting Support, Station Project Management, and Audience Insight and Research. These cuts are based on the nature of the positions, not a judgment of the work these staff members are doing, their abilities, or the importance of their unitsí services to your station. We are at this point because of the economy, and must now refocus the work in these areas to support station needs most effectively. If you know those affected personally, I encourage you to contact them and offer your support, as well as access to your professional network. We have many good people at NPR, but those that labor behind the scenes are some of our finest.

The show-related positions will end March 20, 2009, the date of both programsí final broadcast. This date allows stations the necessary time to adjust their program schedules. Most of the remaining affected positions will end on January 1 2, 2009. All affected employees will receive payout of accrued and unused vacation time. Regular employees will receive NPRís standard severance which is one day of severance for every month they have been continuously employed by NPR, to a maximum of 125 days, or about 6 months of pay. Regular staff will also be eligible for up to 6 months of continued health, dental, and vision insurance coverage and outplacement assistance.

In addition to these programming and staff changes, we are greatly restricting the budget for discretionary expenses such as travel, NPR-sponsored events, conferences, training, and consultants in FY09.

We have eliminated all FY09 merit increases for the senior team, which includes all vice presidents and executive staff. All other staff will receive their January merit increases as planned. (Severance packages for affected employees will include their January 1 salary increases.)

I have personally focused on the alignment of NPRís senior team, our current executive position vacancies, and the roles of our senior vice presidents, in an effort to better align work and make changes that will contribute to the net savings for NPR. This resulted in the decision to reclassify several positions: Ellen Weiss, VP for News; Kathleen Jackson, VP for HR; and Joyce Slocum, VP for Legal Affairs and General Counsel are promoted to the SVP level. Debra May Hughes, Executive Director of Public Interactive, is promoted to VP. These changes were made to better reflect the scope of their responsibilities and contributions. Three of these were title changes and did not involve a change in pay.

Additionally, the Board of Directors has asked me to stay on as an Executive VP during the first six months of new CEO Vivian Schillerís transition. I have also m ade a decision to eliminate the Senior Vice President of Strategy and Partnerships position, and Dana Davis Rehm has accepted a new role as SVP of Marketing, Communications and External Relations. This expanded position replaces the currently vacant VP of Marketing and Communications.

The Future

We believe, but cannot guarantee, that our budget plan and the one-time infusion of funds from the reserves will allow us to weather economic declines over the rest of FY09 and into FY10. Everyone in public radio is navigating their way through these tough times.

NPR is losing revenue, not audience or relevance. To the contrary, our shared audience has continued to grow in the face of declining journalism investments elsewhere in20the nation. NPR will always be deeply committed to providing stations and their audiences with the best reporting and story-telling in America. With public radioís expansion into digital media and continued on-air excellence, we are poised for even greater relevance together in the future.

Additional information on todayís announcement can be found in a FAQ posted on

Dennis Haarsager
Interim President and CEO

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