Bloomberg has reported that Singapore Press Holdings (SPH), Singapore’s largest publishing house, is tipped to be cutting jobs as part of an organisational restructure. The report added that the organisation had 4,473 employees at the end of May, this was with a total wage billing of SG$276 million.
When asked by Marketing about the news, a spokesperson from SPH declined to comment. In a statement to Bloomberg, SPH said it does not comment “on market rumors”.
The move comes amid the company’s recent financial results for the third quarter, which saw the media owner experiencing a 45.2% drop in net profit when compared to the same period last year. The drop in profit was attributed to its declining magazine business which incurred impairment charges of SG$37.8 million, along with advertisement and circulation revenue declines. Other reasons SPH cited then for its lacklustre performance were “disruption of the media industry” and a “muted economic environment”.
The drop in ad revenue is not a new problem for SPH. On top of a 18.7% yoy drop in ad revenue in the most recent Q3 when compared against the Q3-2016 results, the company also experienced a 16.8% drop in Q2 this year, and a 13.5% drop in Q1. Last year, SPH also revealed staff reduction of up to 10% over two years following the merger of My Paper and The New Paper (TNP). This is through attrition, retirement, non-renewal of contracts, outplacement and retrenchment, the publishing house had then said.
The news of the new round of job culls come shortly after the appointment of a new CEO, Ng Yat Chung, in July this year. Ng took on the role from Alan Chan Heng Loon. Along with Chan’s departure, the organisation also saw the exit of Patrick Daniel this month. This made room for Anthony Tan, deputy chief executive officer in SPH, to take charge of both the English, Malay and Tamil Media Group and the Chinese Media Group, along with lead the media strategy and analytics (MSA) division.
However, amidst the challenging times, SPH found solace in its property segment to help bolster the dip in ad revenue. Some of this was contributed from its Orange Valley Healthcare acquisition which was partially offset by lower revenue from the exhibitions business.
An expected restructure?
Media industry veterans Marketing spoke to said the restructure did not come as a surprise. Speaking to Marketing under anonymity, one industry veteran who has closely worked with SPH said that the organisation is currently “bloated and suffers from groupthink”. As such, SPH needs to move away from its focus on diversifying its assets, and instead focus on being a content and data company.
He added that SPH needs to look towards reinventing itself by looking externally rather than internally when it comes to change and reorganisation. This needs to result in a change of culture which affects the whole hall of people in the company.
Also speaking to Marketing was Richard Bleasdale, managing partner, Asia Pacific, The Observatory International, who explained that “the move signals a period of huge change for SPH”. Hence, SPH needs to either stay relevant within its primary category, media, or to diversify further into other categories, such as property, which is something it has been looking at.
“Change is uncomfortable, challenging and costly. As such, effective change management and powerful change leadership will also be critical areas for SPH to look at,” Bleasedale added.
Melvin Kwek, former marketing professional from Citi and UBS, and now with a major international bank, said many companies are going through a transformation. As such, companies need to be ready for the digital economy and shift towards how audiences are consuming content today.
Media companies in Singapore, including SPH, have been working to adapt their business models to the digital economy.
“This will help sharpen their competitive edge in the media business. As such, any potential moves may indicate that SPH is aligning itself to its consumer base and ensuring that they remain relevant ahead,” Kwek explained.
“In banking, we have an old saying – ‘The trend is your friend’. Organisations need to evolve according to the business environment and consumers’ shifting paradigms, we all do, or get left behind,” Kwek said.
How should companies evolve to keep up with the changing media landscape?
Many say that SPH should now be taking a leaf out of South China Morning Post (SCMP)’s book, which has positioned itself as more of a content and data company as opposed to simply a publishing house. Following the publication’s acquisition by Alibaba Group last year, the company took down its paywall, with a new focus on finding the right media business model.
For media companies to stay resilient in the face of disruption today in the landscape, Bleasedale outlined three key focus areas. The first is setting a strong and clear vision for the business and ensuring employees, business partners and consumers understand it. Next is operationalising and celebrating change, which has to be part of the everyday culture, not an off-to-the-side project. Lastly, companies such as SPH need to invest in its people and take them on the journey for change.
“The SPH brand carries a lot of weight and prestige. It is known as a strong and powerful force within the industry. It has a celebrated history and heritage. All of these factors count strongly in SPH’s favour as it looks to stay resilient in the face of the disruption it is going through,” Bleasedale added.
SPH is also not the only media owner which is facing challenges in the media landscape. Another local media owner, Mediacorp, recently made strides to fully digitise some of its print offerings, the most recent being its decision to bring its TODAY newspaper fully digital. The move resulted in a redundancy of 40 roles. Mediacorp also recently hired Tham Loke Kheng, with senior level experience in both FTA and Pay TV, as its CEO and board director. She took over from Shaun Seow, who departed to join Temasek’s telecom, media & technology investment team, which includes Mediacorp in its portfolio.
It also brought on board Parminder Singh as its chief commercial and digital officer in March. Singh joined Mediacorp from Twitter and his role combined what were previously two separate positions in the company and follows a series of recent hires reflecting Mediacorp’s move to bolster its digital capabilities.