Damned if you do, damned if you don’t. That’s the unfortunate position staff at Independent Media find themselves in.
Management of the company, which includes once-venerable titles like the Cape Times, The Mercury, The Star and Isolezwe has proposed across-the-board salary cuts, possibly to be implemented from October.
These are not the temporary cuts that were implemented by many companies, from Arena Holdings to Woolworths, during the lockdown. In these cases, the cuts lasted three months and salaries have since been restored to normal levels.
At Independent, the lockdown cuts, which ranged from 10% to 45%, are still in place.
Management is now proposing that salaries for job levels C, D and E will be permanently reduced by 20%. Salaries for job levels A and B, which were cut by 10% and 15% respectively during lockdown, will remain the same as the new permanent salary level.
This is according to an email sent to staff by Independent Media COO Takudzwa Hove. The email was subsequently seen by other media.
In addition, management has proposed the disbandment of the group’s pension and provident funds. The medical aid will remain in place, according to Hove.
This means a considerable sacrifice for those employees on the company scheme because Independent topped up individual contributions with another made on their behalf, roughly 6% of gross salary, and made a contribution to individual’s life cover.
Staff will receive their accumulated pension benefits (including the company contribution) and will be required to reinvest it in their own provident fund. In future, they will be responsible for making their own pension fund investments.
In the email, Hove blames the lockdown and poor economy for the state of the company’s financial health.
“Every attempt was made to rapidly reduce operational costs to see us through this crisis. We immediately reviewed our distribution, production and printing costs, restructured workflows and, as a last resort, we had to review our payroll which resulted in the implementation of salary cuts across all job grades.
“With the assistance of our main shareholder, Sekunjalo, we were able to stave off retrenchments to ensure that everybody had a job.”
Hove added that business forecasts showed no indication of company revenues returning to pre-Covid levels.
Employees hoping to jump from what is by all accounts a fear-ridden and toxic ship will find it difficult to do so in the current economic climate. The industry has witnessed a jobs and titles bloodbath in recent months, prompting the South African National Editors’ Forum (Sanef) to express its deep concern at the effect the ongoing retrenchments at media houses across the country will have on South Africa’s democracy.
Retrenchments have also hit Media24 and Primedia, which includes 702, KFM and Cape Talk, as well as national news brand Eyewitness News. The SABC is proposing further retrenchments, as is Arena.
Independent itself went through a round of voluntary retrenchments in September and October last year.
Sanef estimated that about 700 jobs have been lost through retrenchments in the print media sector. This includes the closure of Associated Media Publishers, the selling of the magazine division of Caxton, and the closure of about 80 small print media publications across the country.
The picture is unlikely to improve in the short term. Circulation figures from the Audit Bureau of Circulations of SA, as reported by Herman Manson, have been declining for years, but Quarter 1 of 2020 was particularly vicious, with daily titles reporting circulation declines of between 13% and, in the case of The Star, 20%.
The second quarter of the year was worse, but remains unrecorded because not one daily newspaper submitted circulation figures – for obvious reasons.
Staff at Independent Media, many of whom have defaulted on their rent and home loans, might have cause for some chagrin: while they are tightening their belts, Iqbal Survé, the chairman of Independent and executive chairman of Sekunjalo (which holds a majority stake in Independent through its subsidiary Sagarmatha Technologies), has allegedly used company funds to pay off his private property investments, most notably a set of luxury apartments in the exclusive Silo development in Cape Town’s V&A Waterfront district.
Business Maverick contacted Hove for comment about the latest round of cuts, but had not received a response at the time of publication. BM/DM
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