Star Media Group is embarking on a retrenchment exercise after its recent mutual separation scheme (MSS) "did not yield the expected headcount reduction that would have helped the Group cushion the impact of the sustained soft business," CFO Sam Au said in an internal memo seen by A+M.
As such, the retrenchment exercise aims to meet its intended staff cost reduction targets and will commence in the fourth quarter. The exercise is expected to be completed within the same quarter. This comes as a result of the constant disruptions to the media industry, mainly from digital elements, as well as due to the prolonged of COVID-19, Au said. Star Media Group declined to comment on A+M's queries.
According to the memo, redundancies will be decided based on the need to cease functions or scope of work, as well as reduction in workload in business units due to contractions in business. While the last-in-first-out principle will be practiced in line with requirements of collective agreements and laws currently in place, Au said the company may however depart from this in cases where an employee's performance is below the required level.
"With the business having reduced significantly, the necessity to operate with the same number of employees had to be looked at thoroughly in all segments of the business, as we no longer need the same number of people to sustain the business. Further to this, reorganisation of business operations and the way work is performed would also lead to redundancies," Au explained.
Executives, managers and those in senior positions will receive a rate of 0.5 months of last drawn salary for each year of employment or part thereof or three months' salary, whichever is higher. This supersedes any severance benefit terms contained in any previous documentations issued by the company to the employee. Meanwhile, payment terms for non-executives will be as per terms of the collective agreements with the National Union of Newspaper Workers and the National Union of Journalists.
"We understand that this is a difficult period for everyone and the Group will do its best to ensure the exercise is carried out fairly," Au said in the memo.
Star Media Group is not the only media company to have been impacted by the pandemic. Media Prima also underwent a few rounds of job cuts, with the last round being 30 June this year which saw it retrenching about 300 employees. The job cuts at selected units were to address cost inefficiencies arising from unnecessary work duplication. It also said on 4 June that it is revising revenue models and corresponding cost management as a result of disruptive changes in the media sector and challenging macroeconomic conditions, exacerbated further by unknown variables surrounding the COVID-19 pandemic.
In April, publishing company Blu Inc Media, which published titles including CLEO, Cosmopolitan, Female, Her World, Home & Décor, Marie Claire, Shape and The Peak, shut its doors due to digital disruption and the Movement Control Order. On a similar note, The Edge Financial Daily also ceased operations 13 years after it was first launched in 22 May 2007. Publisher and CEO Ho Kay Tat and editor-in-chief Azam Aris announced on The Edge Markets that FD is unable to survive the double onslaught of the shift to digital news and the current lockdown of the economy due to the COVID-19 pandemic.
Meanwhile across the causeway in Singapore, Singapore Press Holdings retrenched its media sales and magazines operations as part of its media transformation roadmap and to address the impact of COVID-19 on its advertising revenue. First announced last month, the exercise is said to impact about 140 staff from the Media Solutions Division and SPH Magazines, about 5% of the overall media group’s headcount. It will incur retrenchment costs of approximately SG$8 million. Additionally, CLEO, Young Parent and Shape publications will be ceased and also SPH has exited the magazine business in Malaysia.
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