Other cost-savings measures in the plan include a reduction of approximately 8% of its current global workforce and unpaid time off for employees in both Fiscal 2009 and 2010 where permitted by laws and agreements, according to a news release.
Reader’s Digest cited a drop in consumer spending and magazine advertising in most markets in which it operates as reasons for the move.
“We have announced a comprehensive ‘Recession Plan,’ which is our internal roadmap for dealing with the extraordinary effects of this recession on consumer spending. We hope and expect that most of these moves will be temporary and that the company will soon resume the progress it made in Fiscal 2008, when we achieved success in our three-part program to launch growth initiatives, reduce costs and transform the company culture,” said Mary Berner, president and CEO, in the release.
Several media companies have also announced benefits cuts to address the hard economic times (see “Newspaper Company Suspends 401(k) Match, Profit-Sharing Contributions’).