Radio Africa Group, walking the now familiar road taken by its peers in media, has announced general pay cuts for its employees to cushion itself against the adverse effects of the Coronavirus outbreak in Kenya.
The media house, which runs a number of radio stations including Class 105 and The Star newspaper, says while it paid March salaries on time, it is already seeing a major loss in advertising revenue from April that will impact the financial health of the company in the near future.
And to ensure the business survives and sustains itself in the days ahead, the company’s CEO Patrick Quarcoo has announced a 30% pay cut for all employees earning a gross salary of more than Ksh100,000 and 20% for salaries below Ksh100,000 effective 1st of April. [ see full circular at the end of article ]
Seven-figure salaries
“Your sacrifice is not in vain,” said Mr Quarcoo said in a circular to all employees on 2ndApril, 2020. “The pay cut we are all taking should be temporary and should be reversed once the economy returns to normalcy and our revenues return to prepandemic levels. This is an interim measure which will be reviewed periodically based on revenue and cash flow generated and the state of the business going forward.”
The move will cut deeper for most of its top presenters including morning show hosts Maina Kageni and Daniel Ndambuki aka Mwalimu King’ang’i (Churchill) as well as its operations manager Caroline Mutoko, herself a former celebrity presenter on Kiss 100. The three are among top earners at RAG, taking home seven-figure salaries.
Also in the mix is Daniel Githinji Mwangi alias Mbusii, the Radio Jambo reggae host and Sheng master, whose salary now be in the neighbourhood of Ksh1 million since joining Radio Africa at Sh750,000 few years ago.
A similar fate befell Royal Media Services top earners including Citizen TV talkshow host Jeff Koinange (rumoured to earn nearly Ksh2 million), RMS Strategy Director Linus Gitahi and Editorial Director Joe Ageyo, whose salaries have been shaved by 30% .
Mr Quarcoo said after extensive consultation with the Radio Africa Group leadership team to find a solution to keep the business going at this challenging time, it was resolved that that redundancies should be the last option.
“Our first priority at this stage of the pandemic is to at least try and find any way to keep the company afloat and save every job we can,” he said. “For Radio Africa this means that each and every one of us, including myself and the leadership team, have to act in solidarity, for as long as is financially and economically viable, to ensure that none of us loses their jobs and their livelihoods permanently.”
Some experts have predicted that it could take up to a year and a half before the pandemic is contained and the world returns into some form of normalcy.
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The World Health Organization on 11th March 2020 declared COVID19 a global pandemic. Kenya confirmed its first positive case of the disease on 12th March 2020. Consequently, the government announced strict measures to prevent the spread, which included closing of learning institutions and banning gatherings.
Later, as infection cases increased – 110 as at 2nd April – the response was upgraded to require companies to have employees work from home and a daily curfew between 7pm and 5am.
Media business drops
“Last night I was informed that a friend of mine had died in Tanzania, becoming the first corona victim in the country. It has hit home and hit home hard,” Mr Quarcoo said.
Most companies have announced pay cuts, with others asking employees to take leave during the crisis. Nation Media Group has adopted a work-at-home strategy and asked some staff to take leave with senior employees expected to take a pay cut if the situation demands.
For Kenyan media companies, business has dropped by 40% over the past three weeks, according to insiders. Advertisers are facing a similar dilemma: how to keep their staff employed, pay bills, and still be in business when this all ends.
“Many will have no reason to advertise if they are forced to close down and especially with all of their potential customers being told to stay home. Our radio stations, TV station and newspaper, in fact our whole media business, relies on this advertising money to survive,” says Mr Quarcoo.
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He noted that at iHeartMedia, the largest major radio company in the US, senior managers will have their pay cut by 30% to 70% through to the end of 2020. In addition to the senior level cuts, iHeart is also giving leave to a number of employees for 90 days. At Townsquare, another major radio company, 65 employees have been let go, 26 of them from the corporate office.
“We must continue to work from home to try and drive the revenue and performance needed to keep the company going,” Mr Quarco said. “For those not on leave and working from home, remember we may not be in the office but if we don’t work and deliver there will be no Radio Africa tomorrow.”
Below is the circular in full….
UPDATE 5: IMPACT OF CORONA PANDEMIC ON OUR OPERATION AND PROPOSED ACTIONS
To : Everyone at Radio Africa Group 02 April 2020
Dear All
As you are aware the World Health Organization declared COVID19 a global pandemic on 11th March 2020. Immediately thereafter Kenya confirmed its first positive case of the disease on 12th March 2020.
Last night I was informed that a friend of mine had died in Tanzania, becoming the first corona victim in the country. It has hit home and hit home hard.
COVID19 has now infected 785,000 people globally, and 37,686 people have so far died from it. In the United States alone 3,000 people have died, 900 of them in New York. The media in the US is reporting that the unemployment rate in the United States could top 30% to 50%. Commerce has come to a screeching halt. Every industry is being impacted. Media is no different.
With no clear end to the crisis in sight, our advertisers are understandably worried about how to keep their staff employed, pay their bills, and still be in business when this all ends. Many will have no reason to advertise if they are forced to close down and especially with all of their potential customers being told to stay home. Our radio stations, TV station and newspaper, in fact our whole media business, relies on this advertising money to survive.
As you are aware other media businesses worldwide and in Kenya made major moves earlier this week to keep their companies running as smoothly as possible during this global and now national crisis. In the US at iHeartMedia, the largest major radio company there, senior managers will have their pay cut by 30% to 70% through to the end of 2020. In addition to the senior level cuts, iHeart is also furloughing a number of employees for 90 days. At Townsquare, another major radio firm, 65 employees have been let go, 26 of them from the corporate office.
The fact is many companies around the world, and in Kenya, have within a short span of time had to make difficult decisions regarding their employees and their businesses. A large number of people have lost their jobs. Companies are shutting down.
In Kenya some of our competitors last week announced pay cuts across the board, and another of our competitors had earlier on informed their staff of redundancies in a month’s time
BUSINESS UPDATE
We managed to pay March salaries on time but our business is already seeing a major loss of advertising revenue from April that will impact the financial health of the company going forward.
I held several meetings and consulted extensively with the leadership team to find a solution to keeping the business going at this challenging time. In all my discussions and brainstorming sessions with them I made it clear that redundancies should be our last option and if so only if it is unavoidable.
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Some experts have predicted that it could take up to a year and a half before the pandemic is contained and the world returns into some form of normalcy.
Our first priority, at this stage of the pandemic, is to at least try and find any way to keep the company afloat and save every job we can. For Radio Africa this means that each and every one of us, including myself and the leadership team, have to act in solidarity, for as long as is financially and economically viable, to ensure that none of us loses their jobs and their livelihoods permanently.
We all, therefore, have a collective responsibility to each other to save as much money as possible in order to weather the COVID19 pandemic without any of us having to be declared redundant within this financial year.
WAY FORWARD
Consequently and in order to ensure the business survives and sustains itself in the days ahead, we have come up with the following measures that will apply to all employees immediately:
- Effective 1st April 2020, all employees earning a gross salary of more than Kshs. 100,000/ will take a 30% pay cut.
- Effective 1st April 2020, all employees earning a gross salary of less than Kshs 100,000/= will take a 20% pay cut.
You will each receive a personal letter confirming this decision seeking your formal consent. If you have any clarifications please contact the HR department.
I take this opportunity to assure you that your sacrifice is not in vain. The pay cut we are all taking should be temporary and should be reversed once the economy returns to normalcy and our revenues return to prepandemic levels. This is an interim measure that will be reviewed periodically based on revenue and cash flow generated and the state of the business going forward.
I want thank you all for the commitment and hard work you have shown the company since the WHO declaration of the pandemic. I urge you all to remain guided by all the directives given by myself and HR in relation to your shifts, remote/workfromhome guidelines and leave management.
Additionally, we must continue to work from home to try and drive the revenue and performance needed to keep the company going. For those not on leave and working from home, remember we may not be in the office but if we don’t work and deliver there will be no Radio Africa tomorrow. Let’s all put in the work to maintain the business
If there are additional thoughts that you may have that will help us ride this through please email me directly with the same subject.
I wish you all good health and urge you to stay safe.
Regards,
PATRICK QUARCOO, GROUP CEO
