SPH to cut 5% of staff across media group and magazine teams as it restructures

Singapore Press Holdings (SPH) will be undergoing 5% reduction in staff numbers across its Media group by the end of this year. The local media company will be incurring approximately SG$8 million in retrenchment costs due to the reduction exercise.

In a statement to Marketing, a SPH spokesperson said the main divisions impacted by the restructuring would be SPH Magazines and the Media Solutions division. The 5% figure refers to about 130 staff in these divisions, which totals to approximately 70 retrenchment cases. According to the spokesperson, there will not be a reshuffle in leadership, nor will the newsroom be affected.

"The restructuring effort is a response to the market and needs of our advertisers. This exercise will enable integrated selling of our rich content and advertising solutions across all platforms," the spokesperson added.

According to a release sent by the company the exercise is expected to be completed within the first quarter of FY19/20 and SPH has informed the Ministry of Manpower and the NTUC on this exercise. Affected staff will receive compensation on terms negotiated and agreed with the staff union. SPH also added that it has also been working closely with the union and e2i to ensure that affected staff receive the help and support they require during this period. This includes on-site career guidance, employment placement services, as well as professional counselling support.

Most recently, revenue from the media segment fell by SG$78.9 million or 12% to SG$576.9 million as total print advertisement revenue decreased by 14.9% or $57 million and total circulation revenue declined by SG$11 million or 7.3%. However , the digital side of the business showed healthy growth. Daily average newspaper digital copies posted an increase of 19.3% while newspaper digital advertisement revenue also grew 6% year-on-year. Effective cost management measures reduced production costs by 5.4% and staff costs by 6.9%. This helped to contain the decline in Media pre-tax profits which fell 44.6% or $44 million to $54.7 million.

SPH CEO Ng Yat Chung said the restructuring will enable the company "to deliver more effective solutions" across various media platforms to meet the evolving demands of its advertising customers.

"We continue to invest in the newsrooms and digital media capabilities while remaining disciplined about cost. This restructuring exercise is necessary to enhance our operational efficiency and strengthen our position in this challenging economic and media environment. I would like to thank the union for its understanding and support through the exercise," he said. He added that the media business continues to be challenged with the decline in print advertisement and circulation revenue.

"But we are seeing progress in our digital transformation strategy in terms of improved digital advertisement and circulation growth," he said.

David Teo, president of the Creative Media and Publishing Union (CMPU), said the SPH management shared with the union the rationale of the exercise and support they will be providing to affected staff. He added that CMPU worked with SPH on the compensation packages.

Upcoming changes

SPH added that to provide advertisers with more effective marketing solutions, SPH has been adopting an integrated sales approach that cuts across platforms, formats and titles, targeting the audience in various ways. It noted that although SPH’s total audience across its platforms has increased, its print revenue continues to decline.

"In addition, the uncertain macroeconomic outlook this year has seen consumer demand fall and advertisers scaling back on advertising spend," it said. To augment this move, SPH will also invest in solutions that will make its print advertising more interactive and trackable. It is also formulating more hyperlocal advertising solutions, using a combination of offline and online media that will make a more lasting impact on potential consumers.

SPH added that it is now a "good time" for the company to consolidate its strengths as a media owner and streamline its media and magazines operations. As such it will be restructuring its media solutions and magazine business to enable integrated selling across all platforms. By selling its newspaper and magazine titles together not only across print but also digital, voice and outdoor formats, SPH says it will bring together the specialist appeal of many of its magazine titles to the specific audience groups it serves (women, luxury, fashion, technology) with the broader mass market audiences commanded by its newspaper titles.

"This will allow clients to reach both the national audience for broad awareness campaigns, as well as target more specific audience groupings - all from a single relationship with the SPH media sales team," the company said.

Readers are also said to benefit from the greater sharing of content resources within SPH across platforms and titles. For example, HardWareZone’s tech expertise will help beef up the tech columns of news titles such as The Straits Times and The Business Times. Some of the content can also be ported over to radio and even SPH’s out-of-home screens in lifts and commercial areas. SPH added that it will intensify efforts to make content liquid across audience-centric platforms. This ultimately will drive subscriber and advertising revenue.

In its financial report, SPH said innovative customer-centric products have succeeded in broadening audience reach. The news tablet campaign which was launched in March with the Chinese newspapers has gained over 10,000 sign-ups, of which three-quarters are new subscribers. The latest campaign launched in September 2019 for Berita Harian,  has also received a strong response. The Media segment is also investing in data analytics for better understanding of the audience and customers, SPH added.