Incisive, the heavily indebted private equity-owned media group, has asked its 1,800 employees to take a week's unpaid leave to avoid redundancies.
The Accountancy Age and Computing publisher has asked staff to take the week off between Christmas and New Year, and will average out the cost to the pay packet over the financial year. The group will not then be forcing employees to take a big hit in just one month.
Tim Weller, Incisive's chief executive, said: "What we have done, in keeping with a number of our peers, is ask staff to take a week off unpaid instead of making redundancies. This will minimise job losses and we will deduct pay over a 12-month period."
The company employs 700 people in the UK, 100 in Hong Kong and the remainder mostly in North America. It is estimated that the move could save the business about £1m, although Mr Weller declined to comment on the figure. He informed staff of the plan on Thursday.
Incisive, which was bought out in 2006 by private equity giant Apax Partners in a £208m deal, breached its debt terms in December. Apax is reportedly considering pumping cash into the group to ease the concerns of the banks. Incisive has around £400m in debt on its balance sheet.
Rival business-to-business media group Euromoney Institutional Investor, which publishes around 100 titles, launched a similar drive last week. Staff earning more than £25,000 a year have been asked to take a week off unpaid, which will be spread over pay cheques from June to December.
The media sector has been hit hard by the credit crunch, particularly by the decline in advertising revenue and job ads. The Independent on Sunday and daily sister title The Independent have been involved in a redundancy process. Independent News & Media chief executive Anthony O'Reilly announced his departure from the group on Friday.
Channel Five and ITV, the terres-trial broadcasters, cut nearly 700 jobs between them earlier this month. The future of the whole industry is being reviewed by the Government.
Johnston Press, the regional newspaper group that publishes The Scotsman, confirmed a debt burden of £476.8m in its annual results last week. The company's share price closed at 5.3p on Friday, valuing Johnston at less than £33m. Many observers would like a change to primary legislation allowing major regional press groups to merge, which is currently viewed as anti-competitive.
KPMG, the big four accountant, has been appointed to advise Johnston on refinancing the debt pile this summer.
KPMG has had its own problems. The firm has received applications from 85 per cent of its 11,500 partners and staff for its "Flexible Futures" programme. This offers an alternative to redundancies, including sabbaticals on reduced pay.Reuse content