Leading live entertainment company Live Nation Entertainment (LYV -0.42%) has furloughed 20% of its full-time workforce, according to a Billboard report. As live entertainment continues to be virtually shut down to help prevent the spread of COVID-19, Live Nation announced in April 2020 that it would implement a cost and cash management program to weather the suspension of events.
The plan included up to 50% salary reductions for senior executives and a full elimination of pay to the CEO for the remainder of the salary reduction program. The furlough of 2,100 of the company's 10,500 full-time staff is now also part of the cost reduction program, according to the report.
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In its first-quarter earnings report on May 7, 2020, Live Nation said it had both a $600 million cost reduction program and $1.0 billion cash management program targeted for 2020. The employee furloughs are reportedly part of the cost reduction program.
The company believes that customer demand remains intact, as it said that 90% of music fans decided to hold onto tickets when shows were rescheduled, rather than accept ticket refunds. It said that 80% of shows have been rescheduled, rather than canceled, as part of the pandemic response.
To help bridge the gap until concert gatherings are safe, Live Nation issued $1.2 billion in debt last week. The issuance of 6.5% senior secured notes was increased from the initial plan of $800 million. The capital raise is in addition to the $3.3 billion in cash and cash equivalents the company had on its balance sheet as of March 31, 2020.
