MediaCorp makes cost cutting move

Singapore - Sagging advertising income has forced MediaCorp into implementing a range of cost-cutting measures which include unpaid compulsory leave, in a bid to avoid retrenching staff during the current economic depression.

Staff at the media giant, which employs around 2,500 people, will reportedly take common block leave during which MediaCorp will shut down operations to save on utility costs and other overheads. Round-the-clock services, such as news, broadcast transmission, live radio and advertisement bookings will not be affected. The first stretch of three days begins from 28 January to 30 January, just after the upcoming Chinese New Year public holidays.

The company also confirmed that it would cut around 10% off its annual wage bill by introducing a shorter four-day week, to alternate with the regular five-day one, from the next financial year starting in April.

In response to whether the company's marketing budgets would need to be scaled back considerably to avoid job losses, a spokesperson said "as long as productions/services are not affected, marketing dollars will be required to promote the products/ services".

"Non-wage related costs like travel and utilities for example would be the first items to be pared down as much as possible," the spokesperson said.

As one of Singapore's largest marketing spenders, MediaCorp relies heavily on advertising revenue which forms the bulk of its income, and indications are ad spend in the region will continue to slow this year. As much as 20% of marketers polled in the region by R3 late last year agreed the downturn would significantly impact their marketing budget 2009 forecasts by more than 20%.

MediaCorp declined to reveal weakened ad revenue figures but in October last year, the company already launched its own advertising enquiries hotline targeting small and medium enterprise owners (SMEs). At the time of its launch, MediaCorp said the ad hotline was not a cost-cutting measure and would be manned by the company's sale staff.

The media giant also recently consolidated its online and mobile properties under a single division called Interactive Media Division (IMD) which will run as a separate business from the current two television and news/radio/print business clusters.