Liveblog of CBC budget town hall

Started 2009.03.25 11:45. (Printable version.)

HUBERT LACROIX: Our financial troubles and possible consequences have been the cause of much speculation. As unfortunate as the situation has been, I truly appreciate how well you have been able to maintain your collective concentration on our programs and services.

Our executive team and I have been working (on a solution), and it’s not been fun. We can’t really escape the realities that are affecting the economies of the world. We are here today to expand on what’s in store for our Corporation.

I know that some of you might be more anxious than others, that some of you may be angry or puzzled by it, actually upset. That’s understandable – and it’s OK. Some of you might have questions that we don’t have answers for; that’s OK.

The changes are significant and will take time to talk through – more thoroughly not only with you, but with our stakeholders, partners and audiences across the country. This isn’t something we can deal with in one moment; (you can) trust that our communication will be ongoing and you will get all of the information you need. And believe me when I say that we will work through this together.

As for today, here’s what we’re doing. We pre-recorded a presentation a couple of days ago in both French and English. My presentation is in both languages [which, we will later hear, run intermixed at the same time on the sole audio channel] . I will talk to you about my three priorities – people, programs, and our safeguard (protection) plan and how they will be affected. Richard and Sylvain will then discuss how programs will be affected. Then we’ll come back here for a few questions and answers and we’ll wrap up.

[English and French videos run simultaneously with both audio tracks overlapping each other. Way to go, national governing broadcaster.]

  • We need $171 million and have to lay off 800 people. 400 for CBC.
  • The plan that was approved by the Board involves sales of a value of $25 million, which the government will allow.
  • You know that I believe in you.
  • Natural attrition, freeze salaries.
  • I’ve been surprised by some comments I’ve received about executive management compensation. It’s pay for performance, which means they’re paid only if a manager meets their performance requirements. $4 million is the total reduction these people are contributing. Removing bonuses doesn’t work in a world where we still wish to maintain some kind of competitiveness.
  • Sizable amounts of money we’re taking out of our program schedule – over $50 million.
  • Not changing noncommercial nature of radio; not adding American programming; maintaining strategic investments in new media; doing everything we can to maintain our presence in the regions. CBC and Radio-Canada to continue to work together.
  • We must shift from being a TV and radio provider to a source of video and audio content. Potential platforms, not just the present ones.

(Stursberg comes on, with the same overlapping of audio.)

  • Services will lose $85 million from budget.
  • Maintain share gains in ratings on both radio and TV. First time our all-Canadian schedule is beating all-American schedules [if that’s what he really said on the unintelligible audio feed] .
  • The process of news renewal must continue.
  • Continue to invest in new platforms. (Use the word “hostage.”)
  • Radio is about 19% of total English budget. $14.5 million of reduction, or 17%, will come from radio, the rest from TV. Networks, 62%. Trying to cut more at the level of the network.
  • All major morning radio drive shows maintained. Radio One schedule remains largely unchanged.
  • TV: More repeats, but maintain prime-time CanCon. This will maintain revenues to the maximum extent possible and our attractiveness to the Canadian people.
  • No stations will close.
  • Will direct more dollars to our online property.
  • Tomorrow all managers will meet with their staff, detail what the cuts are. Impossible to tell you exactly who will go and who will stay. There will be a lot of voluntary retirements, then use the vacancies to minimize extent of reductions. Nobody will receive any notices until the middle of May.
  • Will be a town-hall meeting where I’ll talk more about English strategy.
  • After the economic downturn ends, we’ll be back stronger.

(Sylvain comes on, thankfully speaking single-track English.) The real global problem for French services now is about $51 million. Then $34 million we have to solve internally. 336 positions to be eliminated, 70 from the regions. Money’s lower but layoffs are higher (compared to English) because we have a lot of people producing things internally.

Will try to organize schedule to preserve the ability of our services to bounce back. Two or three months. Will try to recover right after that [after when?] as the most powerful information and news services and be at the centre of Canadian life for all Francophones across the country. Thank you for helping us manage this difficult situation.

(French-language speaker admits audio problem. Then says it in English. Just go to iO, he tells us!) It’s important stuff, what we’ve just said.

As I told you from the outset, operational details will be told to you by teams rolling out in the next 24 hours. We have thousands of employees to meet, so please be patient with us. Expect to hear more about how this plan affects you, your group, your colleagues. (Can pose questions on iO.)

Q&A

  1. Q. from Felicia Chin in Calgary: (No audio.)

  2. Q. from Chantal Gélicas from Outaouais: (No audio.)

  3. Q. from woman in French: Don’t you think your $125 million in asset savings are a bit high in the current market, and what happens if you don’t hit that?

    A. (French): Some funds are due from certain transactions in accounts. Those aren’t effected by the economic environment. We’re quite confident we can put together the $125M.

    A. (English): We’re looking at two groups of assets in the short term – amounts owed to us that we accelerate, which affects the budget in the years to come but gives us cash on hand. Second is real estate – try to see if we can sell and lease back. If we don’t get there, we have to go back to the drawing board.

  4. Q. from woman (French): (Unintelligible; no answer given anyway.)

  5. Q. from man: Budget reductions will do what to audience levels?

    A. (French): We’ve done a lot of work on that. Next year’s ratings shouldn’t change. We’re still growing on the Web.

    A. (English): Target this year was 8% share on TV; we are at 8.9%. I think that if we had not had these reductions we could have grown faster, but we have smart ideas in mind to preserve what we’ve got. Radio: Trying to maintain our share, but lift Radio 2.

  6. Q. in writing (French): What about salary increases? (Restated in English: There’s a shortfall on salary funding. What’s that all about?)

    A. from Hubie: We were expecting and the government has identified an increase of 2.3%–2.5% in salaries. Government rolled that back to 1.5%, a $7.5M hit.

  7. Q. from woman: (Unintelligible.) (Diversity in the workforce?)

    A. from woman: If we understand the question correctly, we’ve been planning for a while now to mitigate the damage through a voluntary retirement program so we can protect our junior employees [sic – hold them to that promise] and manage diversity through the workforce. This is a real key driver for us and something we are actively working with the unions on.

  8. Q. from woman: CBC Television and revenue shortfall. Why is that every component in the corporation has to come through with job and budget cuts?

    A. That question is an important one. Have to keep a couple of things in mind. We cannot continue to be just a conventional service. What I said in my opening remarks still holds, obviously: When we’re more and more one company and all the services benefit each other and transfer their work from one platform to another as we become a content company. This is all about all of our services being affected the same way. That’s why when our revenues drop, all sorts of revenues have been affected in this financial crisis.

    Stursberg: It’s a $171M problem for the company as a whole and a $60M-to-$65M ad problem.

  9. Q. from man: When you talk about working with the unions to reduce layoffs, tell us more about how that process has been.

    A. We’re trying, in every way possible, to reduce the impact on employees. But with voluntary retirement and other programs, we hope to reduce layoffs. What we’re trying to do to bring this 800 number down is (voluntary retirement), and those conversations with the union are ongoing.

  10. Q. from woman (apparently in writing): How can you accept to give 50% of the bonuses to senior management? Will you counsel voluntary retirement?

    A. (French): They’re essential in the remuneration of anyone in the company. Tied to goals. They’ll be contributing $4M to the reductions. That contribution is important and needs to continue in the market we’re in.

    A. (English): I know this has been a question. The senior executives of the Corporation and all the managers – all 553 of them – have these amounts paid to them only in circumstances when they meet criteria set in their original objectives. These 553 senior managers and executives will contribute about $4M to cost reduction. That’s a significant amount and represents, for the most senior members, up to 20% less in their take-home pay. I think that’s significant and we’ll do it that way.

  11. Q., French, in writing: (Missed. About how to protect the regions.)

    (Sylvain answers in French.) Stursberg: Increasingly we’ve been trying to push network shows into the regions for radio. Right now about 50% of radio programming is from regions. Same with TV: Regions really matter. That’s why we’ve been growing our supper-hour newscasts. For English services as a whole, about 38% of total costs come from the regions. We have cut the regions about half of their total proportion in the budget, and have succeeded in closing no stations. This is the best compromise we can make.

    Hubie: Important to retain our geographic footprint across the nation, so that’s why we aren’t cutting stations. This all assumes we can get the dollars we need to balance budget.

  12. Q. from woman in French: When you hear the numbers, there seems to be more cuts being made in French than English services, also dollars being taken out.

    A. from Sylvain (French): On French services, particularly in Montreal, we produce a lot internally [I think he means in-house productions] . Budget is about 60% CBC/40% Radio-Canada. But salary costs for Radio-Canada are much higher.

    Hubie: A lot of the French stuff is done internally with our own employees – very different from what CBC English does. But about the same number of employees in the two networks. So when you start taking costs out of French services, a very high number of employees are affected.


HUBIE: You know, obviously this is bad news. We can’t sugarcoat it in any other way. But we can’t afford to get lost. We’re doing really well in some ways. And you guys were reading we are doing exceptionally well in services both en anglais and en français. This is what we have to keep preserving so when the financial crunch is over we’re equipped to be a much better publish broadcaster and to work from a position of strength.

It’s been a tough morning. Thanks for listening to us.

(Ends 2009.03.25 12:44.)

17 comments:

  1. Anonymous
    Posted March 26, 2009 at 9:37 am | # | Reply to this masterpiece

    ""In a company where 60% of the overall budget goes to salaries, it's simply impossible to bridge a gap of this magnitude without having a major impact on people," said president and CEO Hubert Lacroix…"

    Yet,CRTC data submitted by CBC show that salaries were less than 50% of budget in 2008:

    Total Salaries & Benefits $771,074,000
    Average number of employees 10,200
    Operating Expenses $1,597,795,000

    Whos right, Lacroix or Lacroix?

    Lacroix, crucifix,

  2. Anonymous
    Posted March 26, 2009 at 6:20 am | # | Reply to this masterpiece

    God, morale was in the shitter already when I was rotting in that tomb a few years ago…can’t even imagine what the atmosphere is like these days. Best of luck to those who are being cast out.

  3. Anonymous
    Posted March 25, 2009 at 7:27 pm | # | Reply to this masterpiece

    On the same day they let someone in my department go by not renewing their contract, they hired a NEW director from outside.

  4. Anonymous
    Posted March 25, 2009 at 7:14 pm | # | Reply to this masterpiece

    Yeah, my job went kablooey a while ago.

    And I can now kiss goodbye any broadcasting or arts related job I was hoping to get; there are gonna be 100+ people in line ahead of me.

  5. Anonymous
    Posted March 25, 2009 at 6:59 pm | # | Reply to this masterpiece

    Hell, I already lost my job, and this is depressing me. :(

  6. Anonymous
    Posted March 25, 2009 at 5:24 pm | # | Reply to this masterpiece

    anonymous 3:26 clearly hasn’t worked at the ceeb. No one who’s worked there thinks it’s overstaffed… except at the managerial level

  7. Dwight Williams
    Posted March 25, 2009 at 5:15 pm | # | Reply to this masterpiece

    Anonymous 3:26 PM: You’re perceived as being sadistic for effect, and it’s not appreciated.

  8. Megan
    Posted March 25, 2009 at 4:23 pm | # | Reply to this masterpiece

    Barry is right. When you announce layoffs, you only get part of the savings in the first fiscal year. It might be as little as 25% of the savings. This is because the job doesn’t disappear on April 1: there is a notice period and there are likely other costs involved in laying people off.

    You don’t see the full savings until the next fiscal year.

  9. Anonymous
    Posted March 25, 2009 at 1:26 pm | # | Reply to this masterpiece

    CBC has been overstaffed with overpaid employees for years—Another 800 jobs should be cut!!!

  10. Barry Kiefl
    Posted March 25, 2009 at 12:21 pm | # | Reply to this masterpiece

    800 jobs only accounts for about $70 million in salaries. In 1985 and again in 1991 there were large staff reductions and they were announced around Christmas, so that the Corporation started the new fiscal year without these positions. The Labour Relations Board required 13 weeks notice for layoffs, which meant Christmas notices went into effect around April 1st. Unless I am mistaken, the government covered all downsizing costs in those days but that may not be the case here and these layoffs won’t take effect until well into the new fiscal year. If there really is a $170 million shortfall in 2009-10, where will the other $100 million come from and will the government pay downsizing costs? If not and the 2009-10 budget has to balance, then it would be necessary to layoff thousands more staff.

  11. Anonymous
    Posted March 25, 2009 at 12:13 pm | # | Reply to this masterpiece

    Let’s recap:

    Company in the crapper and 800 people to be let go = objectives met and bonuses paid out to the big shits.

    Must be the ‘new math’.

    A message to the top brass – STOP PLAYING US FOR FOOLS!!

  12. Anonymous
    Posted March 25, 2009 at 12:05 pm | # | Reply to this masterpiece

    $125 million from sale of assets? In 2009/10? Delusional.

  13. Allan
    Posted March 25, 2009 at 11:56 am | # | Reply to this masterpiece

    excellent, joe. You’ve earned your executive bonus

  14. Anonymous
    Posted March 25, 2009 at 11:48 am | # | Reply to this masterpiece

    Hold on a second, Stursberg set himself that million viewer objective and failed. He achieved marginal increases in rating by going wildly over budget, buying foriegn crap, essentially creating the current crisis. Performance requirements? What a joke.

    And Anon 1:18 is right, no one would hire these bumblers let alone raid them. Senior managment is completely disconncected from reality.

  15. Anonymous
    Posted March 25, 2009 at 11:18 am | # | Reply to this masterpiece

    r.e.managers meeting performance requirements. WE (bonus-less grunts) meet the targets with regard to ratings, budget objectives etc. Bonuses are collected on OUR backs.
    r.e. retention in a competitive world. REALLY??? Haven’t seen a whole lot of ads for senior broadcast execs. lately! Who exactly is going to raid our management cupboard?

  16. Anonymous
    Posted March 25, 2009 at 11:09 am | # | Reply to this masterpiece

    It’s pay for performance, which means they’re paid only if a manager meets their performance requirements.

    *Or what the rest of us call, “a paycheque”.

    Removing bonuses doesn’t work in a world where we still wish to maintain some kind of competitiveness.

    What does slashing jobs and freezing salaries do to that world?

    Hubert, you disappoint.

  17. Anonymous
    Posted March 25, 2009 at 10:42 am | # | Reply to this masterpiece

    Thanks very much for your update. Job well done.


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