Dow Jones cuts back on benefits
The Wall Street Journal has been making plenty of hay about its rising circulation and the growing number of people online who are using the site, but parent company News Corp is cutting costs as the whole media business suffers from the recession. To that end, here is Dow Jones Chief Executive Les Hinton’s Monday memo on some benefits cutbacks that the company is instituting.
Many companies are resetting their benefits in reaction to the economic challenges of the moment. Dow Jones has felt these same challenges and our business is far from immune to them. Unlike other media companies we have been able to avoid making changes driven by short-term necessity.
What we have done over the past year-and-a-half is to undertake a deep review of our entire benefits program. That review is complete, and today we are announcing a major change in our retirement programs. We are modernizing our approach to retirement savings and aligning our program with the market, News Corp. and our view of the future for Dow Jones.
Key changes include:
The Money Purchase Plan will be frozen as of July 3, 2009. The 401(k) Savings Plan will be enhanced. The net effect will be a lower rate of company contributions.
The retiree healthcare subsidy will be curtailed for most employees effective Jan. 1, 2010. Current retirees or those employees who on Jan. 1, 2010, will be age 50 with at least 5 years of service or have 20 years of service regardless of age will continue to be eligible for a subsidy in a revised retiree healthcare plan.
More details about the benefit program changes can be found here.
The new retirement plans will apply to all non-IAPE* staff in the U.S. We intend to seek the same programs when we enter collective-bargaining negotiations with IAPE this year.
This change allows us to continue to provide a valuable benefit while managing expenses prudently. At the same time, we intend to reinvest some of the savings we achieve in new health and wellness benefits to be introduced this year. We want to give Dow Jones employees – whose ages, family situations, and career profiles are more varied than ever before – increased choice and enhanced coverage while providing individuals with better ways to manage healthcare costs. You will receive more information about the new health and wellness benefits later in 2009.
These changes strengthen this company. Comprehensive, competitive and up-to-date, our benefits programs now position us well for the future. That is our focus.
* IAPE is the union that represents some Wall Street Journal and Dow Jones staff. The union has to agree to the changes to make them stick for its members. This is similar to when The New York Times Co cut pay by up to 5 percent for many of its workers. The union that represents New York Times rank-and-file workers, for example, had to approve the proposal, whereas the company could simply impose the pay cut for non-unionized workers.