African News Agency (ANA) has announced possible salary cuts of up to 45% for its employees, linked to a slump in business due to the impact of the coronavirus.
The media entity, which was launched in 2015 by Iqbal Surve, who is chair of Sekunjalo, executive chair of Independent Media, and also chair of ANA, followed the liquidation of the South African Press Agency (Sapa).
Independent Media South Africa publishes, among others, The Star and Cape Times, and is one of ANA's major clients.
According to a notice to staff seen by Fin24 on Friday, the drastic cuts would apply to ANA employees across the board. The company cited a drop in advertising revenue as clients scaled down on spending or cancelled bookings in the wake of the coronavirus lockdown.
"Over the last week, we have seen an increase in the rate of cancellation of advertising bookings that had been previously committed," read the note signed by CEO Vasantha Angamuthu.
The company said salary cuts would come into effect from April, and until the situation stabilises.
"Our payroll bill is one of our highest expenditures. Unfortunately, we are left with no alternative but to take the extreme measure of applying a salary reduction," it said.
It highlighted that the financial pressures faced by its biggest clients, namely Independent Media, ANAPictures and IOL, had a significant impact on its business.
A possible scenario for ANA employees on the lowest pay scale would be a 5% cut, while the worst case scenario for the higher band would be a 45% reduction.
'Can only hope'
"I can only hope the situation normalises soon and we can start planning for the world post-Covid-19," said Angamuthu.
Early indicators for April suggested the entity would miss revenue targets by as much as 40%- 60% in some sectors, he added.
ANA is not the only media company which has been impacted by dropping revenues, Last month, the Mail & Guardian revealed that it may not be able to pay its staff in April, as a result of dwindling advertising income due to the coronavirus.
Editor Khadija Patel said advertisers, which contribute about 70% to the paper's revenue, had been cancelling their campaigns, while the group's live events, which accounts for roughly 20% of its income, had "come to an abrupt halt".
The South African media landscape is facing a difficult period, due in part to a changing operating environment which has seen a shift in advertising patterns and content consumption.