Radio Africa Group employees will from this month be subjected to 20 to 30 per cent salary cuts as the company struggles to generate revenue in the wake of the Coronavirus (COVID-19) pandemic.
In a circular to all members of staff, Radio Africa Group CEO Patrick Quarcoo said the management arrived at the decision after the firm recorded a drop in adverts as a result of the negative effects of COVID-19 on the economy.
Employees earning a gross salary of more than Ksh100,000 will from April receive 30 per cent less what they have been taking home.
“Effective 1st April 2020, all employees earning a gross salary of less than Kshs 100,000/= will take a 20% pay cut, ” said Quarcoo.
“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.”
The CEO said the situation will be even worse in the coming days if the COVID-19 crisis persists.
“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, ” said Quarcoo.
With many companies downsizing, Quarcoo said sending employees home will be the last option for the company hence the decision to reduce salaries.
“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, ” he said.
“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.”
Radio Africa runs several radio stations including Kiss FM, Classic FM, Radio Jambo. The group also owns KISS TV and has the majority shareholding in the Star newspaper.
It also runs several digital platforms for the respective channels including showbiz platform dubbed Mpasho.
Some of the top personalities affected by the huge salary cuts include Classic 105 morning show hosts Maina Kageni and Daniel Ndambuki aka Mwalimu King’ang’i (Churchill) as well as the Group’s operations manager Caroline Mutoko. The three are said to be earning seven-figure salaries.
Daniel Githinji Mwangi alias Mbusii, who runs a reggae show at Radio Jambo will also suffer the huge salary cuts. The funnyman is rumoured to be earning about Ksh1 million per month.
Last month, Royal Media Services (RMS) also informed its employees of 20 to 30 per cent salary cuts beginning this month citing harsh economic times.
“The unprecedented outbreak of the coronavirus in the world and Kenya, in particular, has had serious repercussions on businesses, including ours. This reality necessitates that we take difficult but necessary measures to see us through this period, ” RMS Group Managing Director Wachira Waruru said in a memo dated March 27 addressed to all staff.
The Samuel Macharia-owned media house runs two TV stations, Citizen TV and Inooro TV and a number of Radio stations including popular Radio Citizen.
Some of the staff that the station poached from rival media stations including Jeff Koinange, Linus Kaikai, Joe Ageyo, Victoria Lubadiri, Yvonne Okwara are said to be earning huge salaries with Jeff rumoured to be earning nearly Ksh2 million.
Besides the economical effects of COVID-19, the media industry has in the recent past been hit hard following the exit of betting firms, SportPesa and Betin, from the Kenyan market. The media industry heavily relied on the sporting companies for revenue.