Job Cuts: Firing from the shoulders of 'Demonetisation'
While media organisations try to blame demonetisation for lay-offs, the cold, hard truth is that plans were already afoot to hand out a slew of pink slips
While 2016 was unanimously considered a bad year in the annals of modern history due to its extreme political turbulence, many had hoped that the year 2017 would bring some much-needed respite. Those hopes were dashed quickly. For those in the media industry, the New Year began on an ominous note. Instead of being the messengers of bad news they became its shell-shocked recipients. As many cash-reliant sectors grappled for survival post demonetisation, the media industry too entered the proverbial abattoir as a slew of pink slips were handed out. The news that Hindustan Times (HT) had shuttered four editions and closed two bureaus spread like wildfire in a small industry.
HT closed its Bhopal, Indore, Ranchi, Kolkata, Allahabad and Varanasi editions on January 9, leaving over 150 employees jobless and in the lurch. A journalist working with the organisation who wished to remain anonymous, informed us that rumours regarding the plans to shut down these editions were doing rounds for sometime now. However everyone believed that the layoffs would be done in a phased manner over the course of three to four months. HT also had plans to layoff employees from its Chandigarh edition. The plan was most likely dropped due to the upcoming elections in Punjab. In an effort to restructure and cut costs, HT also abandoned its business desk. The organisation has now decided to syndicate content from Mint for business news. In order to stave off thinning profit margins, the ABP group too reduced the pages of The Telegraph and Anand Bazaar Patrika.
The explanation offered by senior management of these outfits went something like this: Due to a steep fall in consumer spending post-November 8, retail sales had plummeted. The moment sales began to plunge, advertisements also went down. The ban on old Rs 500 and Rs 1000 notes left the media sinking in the wake of lesser advertisements in the third quarter of 2016-17. The third quarter is considered to be the most profitable and busiest time of the year for advertisers, given that it coincides with the festival season in India. As factually accurate this explanation might be, the reality is that it is a classic fig leaf. Even though the HT public relations team has tried to spin this as a decision that was forced on the organisation by forces outside their control, the cold, hard truth is that demonetisation came around at the opportune moment. All demonetisation did was offer a ripe and readymade excuse to senior management to slyly bring down the guillotine. Sources say that in a conference call that was made on November 3, Sandeep Jain, Chief Strategy Officer of HT media had told an investor, “You can imagine that reorganisation exercises like these can be painful because a lot of hard retrenchment decisions that need to be taken. So print is going to be our first focus and once we are done with print, it is quite possible we would like to look into some of the other businesses as well.” Once other media houses caught on to the idea that the Narendra Modi government had offered them an alibi for mass-layoffs, they too joined in the frenzy.
HT closed its Bhopal, Indore, Ranchi, Kolkata, Allahabad and Varanasi editions on January 9, leaving over 150 employees jobless and in the lurch. A journalist working with the organisation who wished to remain anonymous, informed us that rumours regarding the plans to shut down these editions were doing rounds for sometime now. However everyone believed that the layoffs would be done in a phased manner over the course of three to four months
Rumours of pay cuts, bonus cuts and layoffs are doing the rounds in The Times of India, Economic Times, Business Standard, NDTV, The Hindu and many other prominent media organisations. The rumours gained traction after Vineet Jain, Managing Director of The Times of India, tweeted about the dip in consumer spending, retail sales, real estate sales, advertisements and profits. He ended the tweet by saying that salary cuts are expected.
The sudden sacking of journalists once again highlights the minimal job security in the profession of journalism. Most journalistic organisations hire employees on a contractual basis. These employees are not under the protection of the wage board, which has started becoming defunct in terms of print and electronic media. Seema Mustafa, Editor, The Citizen, talking to Hardnews said, “It's really terrible, it was not happening in print earlier. It all started when contractual form of hiring was introduced by The Times of India, instead of coming through the wage board. There is no protection to journalists now, which was earlier ensured under the wage board.”
Former Press Club of India President Rahul Jalali called the move to layoff journalists ‘absurd’ . According to him, “While big companies are firing their employees, shrinking their pages and closing down editions, small and regional media is behaving differently with no such news of people being fired.” Blaming the management for using demonetisation as an excuse to fire journalists, he added, “How many mangement people have been fired from these organisations? It's just journalists who are facing the consequences.”
Adding insult to injury, no media association or bodies have stepped up so far to take up the cause of these jobless journalists. A journalist cannot take on a powerful corporate house or a politician head on and do justice to his work until and unless he has some job security and protection. The growing penetration of management into the editorial realm is hampering the freedom of the press. Media bodies like Editors Guild of India, and even the Press Council of India do not take cognisance of this matter which is a growing concern for journalists, both seasoned and budding. The only organisation which responded to our queries was the Indian Federation of Working Journalists (IFWJ). Vipin Dhuliya, the Secretary of IFWJ said," IFWJ condemns this move by numerous media houses to layoff their employees without prior information or any compensation. Efforts should have been made to place these journalists in other organisations before sacking them straight away. If these journalists approach us, we will provide them with legal advice and assistance."
“While big companies are firing their employees, shrinking their pages and closing down editions, small and regional media is behaving differently with no such news of people being fired.”
An editorial-management meeting recently took place in The Times of India a few days ago to discuss the impact of demonetisation and possible ways to tackle the problem. While employees in Economic Times were told ‘not to worry’, a journalist with the Mumbai edition of ET informed us that nothing can be ruled out at the moment.
Hardnews also accessed an email which was sent to every employee of NDTV telling them to implement measures in order to reduce overall costs by at least 20 percent. The mail stated, “India is in the midst of an economic slowdown. Media companies, including NDTV, have been affected by lower revenues as most corporates cut their advertising budgets when there is an economic crisis. We need to reduce our overall costs by at least 20 percent. These steps are being taken as a purely temporary measure, a one-time course correction to bring us back on track.” A similar mail was also sent to employees and journalists in The Hindu which stated that the move to scrap old notes has put “near-term pressures on our revenues, specifically advertising revenues.” The mail asked employees to try and judiciously use resources which are in their control.
The Indian Media-unlike media organisations in other countries that rely more on paid subscribers-is heavily dependent on advertising. Due to this overt dependence on advertising, it is now struggling to generate revenue. Advertising agencies faced a dip in their business by over 40 percent in December, with advertisers cutting down their costs and other spendings. Auto, real estate, durables, jewellery, FMCG sectors suffered the biggest blow post demonetisation with the automobile sector registering a 16-year low in their sales. The automobile industry is one of the biggest advertisers in print media. The last time such a steep fall in sales occurred was in 2000 when sales fell by a whopping 21 percent. 2000 was incidentally the year the dotcom boom started unravelling.
Market experts believe that the negative spiral in FMCG and real estate sectors was largely due to the fact that most transactions are carried out in cash. Due to the cash crunch sales began to plummet faster than a plane without fuel. As a result of falling sales companies began cost cutting. The first cost centre that was targeted was advertising.
A similar mail was also sent to employees and journalists in The Hindu which stated that the move to scrap old notes has put “near-term pressures on our revenues, specifically advertising revenues.” The mail asked employees to try and judiciously use resources which are in their control.
As corporate media houses lay off employees and focus on cost cutting, regional media is also gearing up for the trickle down impact. Though the impact of notebandi has not been as brutal on small and local newspapers, the expansion plans of many have been put on hold. Ajay Agrawal, Editor, DLA, said, “The situation at our newspaper is very bad due to the cash crunch as most small advertisements we received used to pay in cash, however numerous regional papers are largely dependent on small or big government advertisements for their revenues. This has been coming in continuously.”
Demonetisation also has freelance journalists worried about their future prospects. Hari Joshi, a freelance journalist talking to Hardnews, was of the opinion that media prospers only until the market is prosperous. He said, “As of now freelance journalism is untouched from this major dip in revenues, but if the situation continues it won't remain unharmed for long.”
Experts believe that the dip in advertising revenues is a short-term bump, but if the market doesn't recover soon enough, then we might be looking at a long-term impact, which will be damaging to both the media and advertising industry.
Advertising agencies indicated that the closing period of the third quarter and the beginning of the final quarter of 2016-17 has been the roughest period in terms of advertising business. Lavlesh Sharma, MD of Delhi-based Albridge Communication said that in the last couple of months there has been a dip of over 40 percent in advertisements. The classified page has been the worst hit in almost every newspaper. “Most of the hindi newspapers have had to reduce their classifieds page due to acute paucity of ads from various sectors,” added Lavlesh. Officials in Sanchar Sewa advertising agency informed us that Dainik Jagran which used to get classified ads worth Rs 20-30 lakh every month received ads worth just Rs 2-3 lakh following the note ban. Amar Ujala reduced its classified pages section from one and half pages to just half a page, Lokmat had to cut down its two pages devoted to classified ads due to a shortage of ads. With the completion of the 50-day deadline and availability of more disposable cash with the people, advertisers hope things will resume and their will be an inflow of money in the market.
While the short-term impact on media has come to light, there could be a long-term impact if the problem persists. Many journalists are now expecting pay cuts and delay in appraisals in the new financial cycle due to poor revenue generation. While reactions to demonetisation are mixed depending on who you ask, the media fraternity clearly sees it as the grim reaper.