SPH cuts wages to rein in costs - Mar 13, 2009 (ST)
The Straits Times / The Business Times News On SPH
SPH cuts wages to rein in costsDecision will slash wage bill by 20%; higher-paid staff to bear the brunt of the cuts.
By Alvin Foo
Mar 13, 2009
The Straits Times
MEDIA group Singapore Press Holdings (SPH) announced salary cuts for about 3,000 staff yesterday, among other cost-saving measures to cope with the economic slowdown.
Staff were told of the measures, which also include a hiring freeze, at a briefing in the afternoon after the share market had closed.
The pay cuts will range from 2 per cent to 10 per cent and take effect on April 1. The company will grant extra leave to staff whose pay will be trimmed.
Singapore's largest listed media company said the cuts, together with reductions in profit-related bonuses, will slash the wage bill for its key businesses by an estimated 20 per cent.
SPH chief executive officer Alan Chan said: 'We need to bring our costs down in the face of a weaker advertising market and an uncertain business environment.
'It is imperative that we prepare for a longer- than-expected downturn so that we can emerge stronger when the economy recovers.'
SPH has also instituted steps such as slashing operating expenses and a recruitment freeze.
Higher-paid staff will bear the brunt of the wage cuts. Those earning $2,000 and below a month will not be affected.
The company said the wage revision was done following negotiations with its two unions.
Mr Johari Sadli, general secretary of the 1,000-member SPH Employees' Union, said: 'It is a measure to prevent more drastic action later on. It is never easy when it comes to wage cuts, but our members generally understand the economic situation.'
SPH said profit-related bonuses will be reduced as newspaper bottom lines decline. This could mean senior management seeing their total annual pay fall by as much as 30 per cent.
The measures are seen as a precautionary move to cope with worsening business and economic conditions.
Mr Chan said SPH is bracing itself for a 'possible protracted difficult period'.
He explained that if the company chose not to act now, tougher measures may be required if it reacts only when 'things get much worse'.
He added: 'By being prudent and acting now, the company is able to take a measured approach. Retrenchment will always be the last resort.'
SPH's announcement comes two months after media rival MediaCorp instituted a range of cost-cutting measures, including mandatory days off without pay, to combat the slowdown and avert job losses.
The pay cuts are not SPH's only move to deal with the downturn.
Last December, it announced other cost-saving measures, including a pay freeze for senior management and a slowdown in hiring.
A company spokesman said then that retrenchments would be the last resort and considered only after a wider-ranging wage freeze or wage cuts had been implemented. SPH's last major retrenchment exercise was in 2003.
In its most recent quarterly results, the media group saw a 34.8 per cent slide in first-quarter net profits to $73 million due to weaker advertising income and a slump in its investment portfolio.
SPH publishes 17 newspapers and more than 100 magazines. Each day, more than 2.9 million people read one of its 17 newspapers, including Singapore's biggest English daily, The Straits Times.
Its websites, such as AsiaOne, The Straits Times Online and citizen journalism site Stomp (Straits Times Online Mobile Print), attract more than 150 million page views a month.