Capital Group Ltd, the company that runs Capital FM radio and capitalfm.co.ke news portal, is still struggling to shake off Covid-19 hangover even as a number of media houses appear to bounce back. In what has left most employees seething with frustration, the Capital Group management has extended for another three months the pay cut implemented at the height of Covid-19 outbreak in 2020.
“… noting the low returns we received in the first quarter, this letter serves to inform you that with effect from 1st April 2022, we propose to maintain the salaries at the basic pay component at the current 80% for the second quarter ending March 2022,” the company’s Managing Director, Mr Feisal Baghazal, said in an internal memo dated 12th April 2022. “The goal is to eventually get to our full 100% salaries as the company’s financial situation completely turns around. These terms are subject to review as the situation is fluid and improving.”
Capital FM, run for many years by the late businessman Chris Kirubi, had a long stint of success until the owner was taken ill and took off from daily management. The Covid-19 outbreak became the straw that exposed the company’s underbelly – revenues slumped as advertising on radio and the website dropped.
Maintaining the pay reduction status quo is Mr Feisal’s first strategic move since he was appointed on 17th January this year through an announcement by the station’s Group Chairperson, Ms Mary-Ann Musangi, Kirubi’s daughter who took over after her father.
According to his credentials, Mr Feisal brings a wealth of experience with over 15 years of leadership, business management, sales and marketing, having worked in senior leadership positions in Coca Cola-Kenya Tanzania, South Africa, Myanmar, Melkam Moringa-Ethiopia and Highlands Soft Drinks-Kenya.
Mr Feisal says in the latest communication that there have been consultations over the period 2020 and 2021 where management explained that to mitigate the company’s tough financial position caused by COVID-19, they had to reduce all staff salaries to stay afloat by meeting its costs and to facilitate preservation of employment.
Consultations with the staff culminated in reductions of salaries by 50% for three months to September 2020. The pay cuts were then extended for a further four months to January 2021 and were maintained at 80% pay to December 2021 as the company’s performance failed to pick up.
While employees here have learned to live with the lower pay, the latest extension caught most of them off guard: the announcement came mid-April, a move seen as an ambush since the assumption had been that the 80% cut finally had come to an end. A dozen days prior, management addressed a staff meeting where the company’s slow recovery was discussed,
“You cannot purport to seek consent to pay a percentage of April salaries midway that month when everyone knew the existing extension had lapsed on March 30,” a senior employee of Capital Group told Business Today. “That consent should have been sought before March 30. Even then, salaries have still been delayed to God knows when.”
Mainstream media houses such as Nation Media Group and Standard Media restored full salaries last year, citing a resurgence in revenues after Covid-19 infections were contained and restrictions withdrawn. Royal Media Services lifted the pay cuts starting 1st April this year.
While Mr Feisal, the new Capital FM boss, paints a rosy picture of the near future, he fails to inspire real hope for a quick turnaround and, most importantly, a return to full salaries and – in turn – the much-needed pay increase to counter the rising cost of living.
“Your hard work and efforts are noted as we can see a significant improvement in our returns from a previous period last year,” Feisal says the memo, seen by BT. “This has been a result of your grit and determination. As discussed in our Staff Meeting held 1st April 2022 at 9:00 am, the company performance is yet to turnover as we did not manage to hit our targets for the first quarter but we have noted the positive outlook in the market and major potential for improvement in the business.”