The April notice from The New Vision newspaper announcing staff salary cuts has started biting as management takes drastic measures to reduce the wage bill in a bid to cope up with the effects of the COVID-19 pandemic.
On Tuesday, Vision Group CEO Robert Kabushenga issued temporary contract letters to ‘essential’ staff with salary cuts, and the staff were asked to indicate on the letter if the pay cut is “acceptable” or “unacceptable.” According to a source, employees who were uncomfortable with the salary cut which took effect on May 01, have been shown the exit.
“Several employees have been sent on forced leave without pay and only a few essential staff have been retained with pay cuts. The atmosphere is tense, but at the same time, we are helpless because it is better than nothing,” a staff who preferred anonymity said.
Apparently, the most affected products in Vision Group are; Bukedde Radio and TV as most of their staff including editors have been sent on forced leave. In fact, Vision Group has temporarily phased out all local publications such as Etop, Rupin, Kampala Sun and Orumuri.
In the new contract letters issued to staff, Kabushenga justifies that management has been struggling financially after losing 50% of its revenue since the COVID-19 lockdown was imposed.
“It is for this reason that the Board took a decision to reduce the cost of the wage bill by undertaking a series of measures that will affect each and everyone across the country. This is an option of last resort that was arrived at after deep analysis of the economic situation, our finances, extensive consultation, and careful consideration of the future of the media business. One of the measures proposed in this regard is a salary reduction for a number of (employees),” Kabushenga said.
According to the new salary structure, Vision Group directors have decided to take a 50% reduction on their own allowances as part of their contribution to a wage bill reduction.
“Personally, I have voluntarily decided to take an 80% cut of my salary. This is a challenge we shall face together and we are going to have a change the way we work if we are going to prevail. This will affect us in many ways. It is the new reality of our business,” he added.
A 2015 parliamentary report showed that Robert Kabushenga was earning gross salary of Shs37.3m per month. 80% salary cut means that he will be earning a paltry Shs7m per month out of Shs37.3m.
Kabushenga added that effective 1st, May 2020 running through to 30th June 2020, staff earning above Shs19 million will 60% pay cut, while those earning between Shs8m and 19m will take a 45% cut and those earning below Shs8m will take a 40% salary cut.
In early March this year, World Health Organisation (WHO) declared a COVID-19 a global pandemic. Most countries imposed a series of lockdown measures that led to the closure of economic activity around the world. This has had an immediate adverse effect on the business including media companies which had been hit so hard due to reduced copy sales for Newspapers and advertising revenue.