SuperMedia Ships Jobs to India….. but Scott Klein Got His Bonus!


Have you seen the latest headlines about SuperMedia? (on October 5th 2010, SuperMedia CEO Scott Klein resigned, visit YellowCrooks.com’s forums for more info and participate in the discussion.)

Idearc becomes SuperMedia on Jan. 4 2010, meanwhile the Yellow Pages publisher lays off 150 workers in St. Petersburg Florida.


Idearc Media is now SuperMedia

Still $2.75 Billion in debt!



SuperMedia, the company that publishes the Verizon Yellow Pages, is laying off 150 employees in St. Petersburg and shipping the jobs to India.

Idearc / SuperMedia has been trying to emerge from Chapter 11 bankruptcy and sees the outsourcing and layoffs as a cost-cutting move.

About 245 people work for Idearc at its phone directory business at 10200 Dr. Martin Luther King Jr St. N in the Gateway business district of St. Petersburg.

Idearc said it will keep about 90 people in St. Petersburg as it transfers much of its publishing business to Tata Consultancy Services of Mumbai. Idearc plans to hand out severance packages as employees are dismissed in phases through next December.

“There are no surprises. In November, we told the staff in St. Petersburg what was happening,” company spokesperson Andrew Shane said. Idearc is also slashing jobs at phone book publishing operations in Los Alamitos, Calif., and Everett, Wash.

Based in Dallas, Idearc spun off from Verizon in November 2006. The $3 billion company distributes about 127 million phone books and owns Superpages.com.

The phone book business has been shrinking at accelerating speed. Between 2005 and 2007, the number of Yellow Pages printed shrank by 1 billion to 13.4 billion industrywide. In a plan circulated to creditors, Idearc estimated its printed book revenue would be cut by more than half to $1.6 billion between 2004 and 2013.

Idearc/Verizon Yellow Pages

Print revenue

2004: $3.5 billion

2006: $3.0 billion

2008: $2.7 billion

Projected 2013: $1.6 billion*

Online business:

2006: $230 million

2008: $300 million

Projected 2013: $598 million*

Industrywide classified yellow pages printed:

Down 1 billion to 13.4 billion between 2005 and 2007

* Best-case scenario

Source: SEC and court filings

Kinda funny. Internally Idearc is going to list Paulson & Co. as an investor on the site. Idearc forgets that Paulson picked up its share of Idearc for pennies on the dollar. Meanwhile if you noticed what Google was considering purchasing YELP for, it makes me laugh at the markets evaluation of Idearc. Just in-case you are not familiar with the situation, SuperMedia (formerly Idearc, which was formerly Verizon Information Services, which was formerly Bell Atlantic & GTE Yellow Pages) is emerging from a pre-planned bankruptcy.

Scott Klein, like many crony CEOs and Executives, has “lined his own pockets,”  and has “feathered his own nest” by hiring “cronies.”

It was obvious to me that Scott Klein planned bankruptcy the moment he took over Idearc in June of 2008. What folks from the investment community are unaware of is the example of corporate leadership that he has set since he took over reins as the companies CEO. SuperMedia (still working on getting used to saying the new name) operates on bi-weekly pay cycles. Media consultants and earnings are rolled in periods consisting of two weeks called “Pay Periods.” During the first part of 2009, Scott Klein instructed sales managers not to report losses (decreases and cancellations) for Pay Periods 12 and 13 of 2009 to make sure that “upper management” would get the semi-annual quarterly bonuses. SuperMedia sales reps were instructed by management not to report cancellations or decreases in order to make sure that the crony executive team and mid-level managers qualified for the incentive payouts for the period ending pay period 13. I was very disturbed by these actions as an Idearc media consultant. You see, as a yellow pages publisher, it is easy for SuperMedia/Idearc to manipulate the revenue that it reports to investors. All Idearc executives need to do to meet a bonus period is wait to report losses and cancellations. What was even more unique was that these instructions also included direction from executives on reporting the losses on pay period 15 and not dumping them all in pay period 14 which was what you normally saw while they reported earnings to Ivan Seidenburg at Verizon. I assume the company’s Board of Directors was paying close attention to this potential manipulation.  Now let me state that I specifically recalled this happening on a few occasions while at Verizon. The difference with Scott Klein, it was a directive that was company-wide and only a few months after him taking over. Maybe he was just taking advantage of the “quiet period”? Post bankruptcy, Idearc is no longer going to be financially liable for these actions and ramifications to retirees and investor’s 401k’s, pensions, and stock portfolios.

Did Scott Klein purposely default on the companies credit facility debt to enter into bankruptcy? Considering the amount of cash on hand to make the payments….. YES HE DID! That is one of the reasons the company was sued in January and April of 2009.

I am confident that the personal lawsuit against Klein and his executive team will have a dramatic impact on the future of the organization. Just as Mike Leach is no longer the coach of my beloved Texas Tech Red Raiders for his actions, I am sure that Scott Klein will no longer be the leader of SuperMedia in the near future. If Paulson does not take control of the company and put someone more capable (such as Scott Laver) at the helm of SuperMedia, it will sink faster than a torpedoed ship. It is time for SuperMedia to cease crony executive leadership and “YellowCrook” WallStreet stock manipulation. Time to come clean. Time to become more creative. Time to make a commitment to become “SuperMedia” vs just lip-service. Time to put clients and service above sales and earnings. You build it….. they will come! You get the idea!

From 2004 to 2010 Idearc Media will shrunk from 3.5 billion to approx 2.5 billion. From 2010 to 2013 the company is projected to shrink another billion. Considering the company is doing a poor job of competing in a fragmented local search market and the usage of print directories is expected to drop even further (thanks to a wonderful tool such as the mobile web browser) I would expect to see continued outsourcing and cost cutting measures. The unfortunate thing is the company has many of the tools and people it needs to turn around, but with continued mismanagement from executives who do not fully understand what business owners want in a local ad agency, I foresee continued client churn and lackluster results in competing against other internet marketing offers.  Idearc does not seem to understand that you can not put an axe over a clients head to keep or pay for a poor performing internet product. The axe that the threatened local advertisers with to convince them to keep their placement in the print yellow pages does not work online. SuperMedia’s SMLocal product is, in most situations, a 12 month contract (at least the sales reps push you to sign for 12 months, thereby locking you into the companies costly management fees) and that just does not work for an internet offering. Why 12 months for Internet Advertising that can be changed daily, unlike a printed yellow pages advertisement. The company does not offer the client the ability to own the work and campaigns it creates on Google or Yahoo search engines. If they build your website, you never own it. Ownership is possession even after cancellation. In the event the company fails to fulfill the promises delivered to you by sales representatives, you are still required to pay for management fees, since your sales representative was paid a commission. I call these sales “Monopoly Money.” They look great on paper (considering a $2k/month budget for clicks and $800.00 per month management fee is really only $800.00 per month to report to investors) but horrible after they are reported. Maybe they need to just report sales on the monies  it actually collects from advertisers vs just the ink on the contract. Maybe they ought to pay “Media Consultants” for revenue and service to clients vs ink on the contract? Of course we know that when you are a large organization, with a very large resource of collections attorneys and agencies, it helps to work with ambiguous contract terms and conditions.

Once the company addresses core issues with its product offering,  if resolved, (although the company may potentially give up something financially in the short-term,) they will gain long-term in reputation and reduced client churn.The company needs to get web developers and marketers in the field vs sending web development work to India. You will be amazed at the difference a search engine marketer, a local CMS based website developer, and client can produce together vs a “Indian” (are folks from India called Indians?) website developer. After all, website companies that have margins like print yellow pages companies, are doomed for failure. How can they compete with local boutique web marketing firms? How can they produce the same level of service and attention to detail? Do all businesses need this level of service? I don’t believe so. I just don’t understand why a client would choose something else? The reason churn is high in a fragmented local search market: Clients have options! Unlike the print industry, which is dominated by major players, unless Google puts out a simplified internet offering, people will continue to see fragmentation in local search. Kind of like the fragmentation the yellow pages industry has experienced since the decline of print (thanks to the  increased amount of competition in the space.)

You piss off your client = You lose your clients investment for future years. You lose a client, you run out of options to replace them.

Over the years, Idearc executives discovered new options to replace the clients it lost as Verizon by recently changing the company’s credit policies. If folks owed money to Verizon Information Services, after a certain period of time, the balance was forgiven by Idearc. This was, what I consider, blatant attempt at earnings reporting and manipulation. Why would you give someone who has never paid you a dime for advertising a second chance? Oh, I know! You want more monopoly money on the books to get your bonuses! Those contracts that your sales reps bring back in the office, you know… the ones your talk about in meetings and management conference calls, do not mean anything to investors like Paulson & Co. They do not mean anything to clients. They are only important to commissioned sales reps and crony executives and managers looking for fat bonuses…..reminds you of other Yellow Crooks huh? Like the folks at WallStreet Banks and Countrywide Mortgage/Enron Executives?

Let’s see how long this kind of leadership continues?!

Let’s see if someone investigates what happened in Pay Period 13, 14 and 15 of 2009, or if the company’s executive and mid-level managerial leadership gets away with another form of corporate fraud.

Maybe SuperMedia needs to consider firing sales reps who get paid to produce “Executive Bonus Monopoly Money” and begin hiring Search Engine Marketers who can service clients local search marketing needs, you know, since the internet is the wave of the future and all?

Here is to Idearc…. errrrr, I mean SuperMedia and Scott Klein…..

May 2010 be a great year. The lives, careers, and financial freedom of thousands of Media Consultants is on your shoulders. May you make choices and decisions that positively impact your clients, employees, and investors. Let’s end the old tricks of the yellow pages industry.

Happy New Year!

too bad 7 out of 10 people prefer not to get another phone book and the phone book companies don’t care. Meanwhile we must dispose of the waste ourselves. OPT IN vs OPT OUT!

Here is the Scott Klein Lawsuit:

Scott Klein Lawsuit for Securities Fraud SEC

Advertisements

30 Responses to SuperMedia Ships Jobs to India….. but Scott Klein Got His Bonus!

  1. me says:

    Laver, briggs, and sandy are all gone jan 4th too…

    • Mike Stewart says:

      Briggs….. Sandy….. equal Good riddance!

      Neither of the two of them are what the company needs. Briggs is failing to keep up with an ever changing search engine marketplace…. Sandy is about as crony as Klein. She proved her cronyism when she put her husband’s paving company in front of existing paving contractors in the Verizon Greater Dallas Yellow Pages this year, against her ethical and honest sales rep, Curtis Allen’s resistance. Amazing what kind of power and influence an executive has over employees.

      Scott Laver should be the one to replace Scott Klein! Sad to see him go! He had the best understanding of the business in my opinion.

      If you take a look at the new site:

      Executive bios

      Click on the links below to view senior leadership bios.

      Scott W. Klein, Chief Executive Officer

      Samuel D. Jones, Executive Vice President, Chief Financial Officer and Treasurer

      Dave Bethea, Executive Vice President – West

      Frank Gatto, Executive Vice President – Operations

      Michael D. Pawlowski, Executive Vice President – East

      Georgia Scaife, Executive Vice President – Human Resources and Employee Administration

      Cody Wilbanks, Executive Vice President – General Counsel and Corporate Secretary

      and the new Board of Directors:

      Board of Directors

      Our board of directors has the extensive professional backgrounds and depth of experience to guide us into the future. Click a board member name to view his or her biography:

      Scott W. Klein

      Thomas S. Rogers

      Edward Bayone

      Robert C. Blattberg

      Charles B. Carden

      Robin Domeniconi

      Thomas Gardner

  2. Mike Stewart says:

    SuperMedia needs to start offering SuperSEO…… but they need to get the web dev department back in the USA vs shipping everything to India. India’s SEO work beyond linkbait, forum/blog spamming, and hard to read copywriting is lacking to say the least. But I am sure India is only going to handle the companies paperwork processing, ad design, and website building….

    Those folks aren’t managing the companies SMLocal? But if I recall the US work wasn’t so good when we had 100 clients per “campaign manager” and what I would consider 10.00 per hour college interns building Google accounts.

    Stay tuned for http://www.yellowcrooks.com

    Hopefully the Yellow Pages high margin crony CEOs will realize that the Yellow Pages sales and pricing models / contracts don’t work in “LocalSearch”

    Anyone disagree?

    Mike

    btw, I love how Klein is telling folks that the company is a pretty much brand new…..

    All he has managed to do is:
    -Get rid of Verizon debt via a questionable bankruptcy on pension holders and teachers
    -create http://www.superyellowpages.com which is basically like doing Typewriter Repair
    -copy ServiceMagic.com’s ServiceGuarantee and rebrand it “SuperGuarantee”
    -lower some ad rates in some areas…. continue to raise them in others
    -Put sales reps on salesforce.com’s CRM to micromanage his sales teams.
    -Outsource (union jobs) work to India
    -Outsource ad design jobs to India
    -Outsource website design work to India
    -Lie to investors on why the company had collection issues
    -Cease paying for the companies debt prior to actually not being able to pay for it (timing the bankruptcy)
    -Pump up his sales team about: SuperTradeExchange, SuperGuarantee, SuperLeads, and other not so “SuperIdeas.”

    What he needs to do:
    -Focus on mobile
    -Focus on SEO
    -Focus on Apps
    -Focus on client churn
    -Focus on multi product
    -Focus on transitioning top tiered clients to special .com departments with the skills that I offer.
    -Increase partnerships and alliances for traffic
    -Increase the number of verticals
    -Change the business model. Focus on Content.
    -Hire laid off content writers across the country.
    -Offer a better value in PPC advertising vs the overpriced underserviced SMLocal offering

    I can keep going…. but you get the idea….

    Klein is pulling one over y’alls eyes as bad as his idol Barry Obama! http://www.yellowcrooks.com

  3. Harvey says:

    Hey Mike –

    Interesting blog! Send your article to FOX – O’Reilly – and let his investigative team work on disclosure and accountability. The bankruptcy courts allowed for these jokers to pull this deal off and allowed for this management team to continue. SDH

  4. […] SuperMedia ships jobs to India, but Scott Klein got his bonus SuperMedia sales reps were instructed by management not to report cancellations or decreases in order to make sure that the crony executive team and mid-level managers qualified for the incentive payouts for the period ending pay period 13. I was very disturbed by these actions as an Idearc media consultant. […]

  5. […] SuperMedia Ships Jobs to India….. but Scott Klein Got His Bonus … […]

  6. hillrich sucks says:

    This company is run by a bunch of jackasses. Bozos and clowns such as hillrich in loma linda are just the start. I wouldnt invest…errrr…throw away a penny with thisidiot ran sorry excuse for a company.

  7. […] (or spin-off) yellow pages publishers have not been able to do. They are all the same. (Even the SuperGimmick that Superpages copied from ServiceMagic.com was too late.) They are a team of horses pulling in the opposite direction. The yellow page industry has very […]

  8. No Name Please says:

    Just want to add, there is no mention, in any article of the 20 employees laid-off in North Greenbush, NY. This is just a start with more lay-offs to come.

    • Mike Stewart says:

      10 out of 28 in Coppell Tx SMLocal PPC fulfillment department got let go.

      This is a move by Klein to show investors how much he can save. The issue is the quality of work will go to crap. India cannot design quality yellow pages, so competitive yellow pages advertisers will need to hire firms to design ads for SuperMedia’s Verizon Yellow Pages and SuperDirect mail products. They are on a very slicky slope (if that is the cliche’) with man power. Luckily he doesn’t have to report headcount numbers so the decreases go in the revenue column.

      If 28 wasnt bad enough… now you are running the risk of not being able to deliver. I am sure that when it comes to SMLocal he is ultimately going to have to train sales reps to fulfill. India is not capable, trust me!

      India designs crappy phone book ads

      India designs crappy direct mail postcards.

      India writes horrible copy and content.

      India is cheap.

      India makes more mistakes on paperwork fulfillment.

      Scott Klein needs to outsource the leadership team and old crony Verizon managers before he outsources hardworking employees.

      • Ima Winer says:

        A peer of mine sent this to me after a recent conversation about the company and the downsizing/restructuring/outsourcing that has become the new norm. Sales Suport functions have also been outsourced. i.e the RIFs in Coppell. The word is that Frank Gatto’s org must cut an additional 150 mil by year end.

        I just received the Greater Dallas book on my doorstep this morning – good thing today is recycle pick up day! I called and Opted Out of all books from this point on.

  9. […] campaign. They must have 10 monkeys in a room and 100 accounts each to manage in order to cover the yellow pages CEO’s fat bonuses and death of the companies print […]

  10. Mike Stewart says:

    How about shoving seniority tenured reps out the door, only to replace them with less expensive new employees so that you can tell Paulson “hey, look! We saved lots of money in expenses.” Too bad Paulson has already discovered that buying stock in a company run by Scott Klein is a mistake!

  11. This is very useful blog for everyone…. Thanks for posting this blog.

  12. A good garage door is like a good outfit. It makes you look good. We should hire you guys to do our SEO work!

  13. I can’t imagine having that kind of debt. I certainly wouldn’t have reacted the way they are. It reminds me of the US economy…

  14. "own brand name" says:

    I wish getting over a broken heart can be so easy as following a few steps to selling more.. but its not� 😦

  15. They definitely need to be doing something very different. Obviously this isn’t working out the way they planned.

  16. laura says:

    the trainers at supermedia have no clue on
    how to train. i quit stupidmedia 2 months ago.
    adele crea and kristi haefner, Gary Madlinger
    all crooks and liers. stayaway from this jerkoff job

  17. In the know says:

    Laver would have been an awful choice. His contribution was to see how much money he could throw at an underperforming sales force, in ways that made it even easier for them to manipulate their commissions.

    • Mike Stewart says:

      Wish I knew who this was. Not like Klein was not the real sales fraud guy. Fraud was big in Texas and Florida….. the best 2 markets with the highest expectations…..

  18. jules says:

    this article fails to mention the closing of the entire publishing office in valley forge pa. I was one of the employees who had their job shipped off to india. This company to this day is still giving it to me up the ass even after I was laid off from them 1 year ago. I hope this entire company fails and scott and his corrupt cronies get to sleep in bed with madoff, I am sure they would make great bed mates.

  19. L says:

    Now the company says there is surplus of people in NY.Here comes another round of lay offs, not to mention all those laid off from the DFW office who’s job went to India (who by they way don’t have a clue what is going on)

  20. Jack Bennett says:

    Dear Mr. Klein:

    I was an Idearc shareholder and don’t endorse the the course of action that you took to alleviate a large debt load that was purposely stacked on Idearc’s shoulders. It’s up to you to lead by example and not rubber stamping board bullshit. The fact that you got hired in as CEO mandates an impartial approach. Really consider what you did. You sandbagged many investors that believed in the concept of Idearc as a stand alone entity with a particular focus.

    First off, I can drag into court a manager in your former organization that let me know what was going on. I don’t mind putting my resources to work regardless of the outcome. I’m not an emotional economist. I believe in fair play.

    Secondly, as outlandish as this might sound, since you don’t know me and have no knowledge of my particualr skill set or sponsers (I’m an investor who’s in for the long haul), I’ll ultimately change the landscape of SuperMedia and Verizon. That’s a promise that I intend to keep.

    • Mike Stewart says:

      Jack,

      Your comments are the sentiments of many folks that invested in Verizon and Idearc. Even the employees of the company invested in honesty, transparency, and good will. Unfortunately VZ and Idearc pulled a good one on us. I lost thousands in company stock. Way to go Crooks!

  21. naguchennai says:

    Jobs in India, Search Online Jobs,
    Employment, Vacancy, Careers in

    Jobs in India, Gulf and International – Search sales jobs, marketing jobs, IT
    jobs, part time jobs, finance jobs for fresher, executive and other levels.
    http://www.naukrijobs.in

  22. Al Soriano says:

    this company actually is a good place to work for, management pretty suck, you have to know how to kiss ass, and who’s ass to kiss, I shouldn’t say all management at supermedia, Publishing sups are the best people to work for, but DA’s management, AMOR GUTIERREZ, the most evil kiss ass person you will ever meet, all I can say is carma will get you, ( Amor ) and CHERYL FAIRCHILD, company is totally wasting money on paying this people, they dont do shit, but to kiss each others ass.

  23. Don'tell says:

    I use to work for this company when it was Idearc. I hope they got rid of Supervisor David Bennett in client care. He was a straight up Jack Ass !!!!

  24. […] SuperMedia Ships Jobs to India….. but Scott Klein Got His Bonus! January 201028 comments and 1 Like on WordPress.com, 3 […]

  25. Still Jobless in St Pete says:

    I knew since day one of Klein’s reign that he was up to no good. It was all “Rah! Rah! Ree! Kick ’em in the knee!” attitude and it was all hogwash. I’ve been unemployed for a while now thanks to his wondrous plan to outsource AM to India. I just found out today that he is no longer there. Whenever I hear the name Idearc and/or Supermedia I get all choked up… Choked up with bile from my upset stomach that is!!!! Gone are the days of “integrity and honesty” for that company. And sadly those were two of the big reasons I wanted to work for Verizon Yellow Pages – honesty and integrity. No more corporate crap for me because I really AM one of the good guys.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: