KUALA LUMPUR, Sept 15 — The Star Media Group Bhd has informed employees that it will undertake a retrenchment exercise after a previous mutual separation scheme failed to meet its jobs reduction target.
According to leaked internal circular, group chief financial officer Sam Au said disruptions to business meant they “no longer need the same number of people to sustain the business”.
“The objective behind the exercise is to reduce the Group’s headcount in line with the contraction in the overall business.
“The contraction basically is attributed to constant disruptions to the media industry, mainly from digital elements, as well as due to the prolonged impact of the Covid-19 pandemic,” he said in the circular.
Au said the group had tried the MSS route to cut costs, but this was not effective.
“In view of this, the Group will be embarking on a retrenchment exercise to meet its intended staff cost reduction targets,” he said in the circular.
This is the third cost-cutting exercise involving job cuts in the company since 2017 but the first in which Star Media Group was directly calling a “retrenchment”.
Global media companies have been operating in a challenging operating landscape that has now been made even worse by the Covid-19 pandemic.
On April 30, Blu Inc Media Sdn Bhd — which had under its umbrella well-known household magazine titles such as CLEO, Cosmopolitan, Her World and Female was forced to shut down.
In June, Media Prima Bhd issued a notice letter to 300 employees who will be let go on July 31 as part of its business transformation plan.
Media Prima earlier announced that it will undertake the next phase of its business transformation due to disruptive changes in the media sector and challenging macroeconomic conditions, exacerbated further by unknown variables surrounding the Covid-19 pandemic.
