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JournalismPakistan.com | Published 6 years ago
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ISLAMABAD – Geo is to cut salaries by 20 percent and sack some staff in a bid to eliminate the gap between revenues and expenses.
A statement from the network said reduction comes into effect immediately and is for employees drawing more than Rs 0.4 million per month.
These cuts will be across the board – starting from the chief executive and managing director to senior anchors and continuing further down.
Staff with salaries of Rs110k to 400k per month face a 10 percent cut. Those below the 110k mark will see no reductions.
Geo cites an economic slowdown - the consequence of a weakening rupee and a drastic reduction in advertising budgets of major advertisers - as the reason for these drastic measures.
The network said that it had faced a survival crisis for many years because of repeated closure of channels. It resulted in a fall in revenue, forcing the company to bridge the gap through large commercial loans.
Compared to 2013, Geo News’ average monthly revenue dropped more than 33%, the statement says. While the net costs have risen by 50% both due to competition in salary by non-commercial entities who had funding from illegal/other sources, the falling rupee-dollar parity and the additional costs of debt servicing against the commercial loans that the network has continued to avail due to the repeated closure of the channels since 2013.
The network pointed out that as recent as April-May 2018, its channels were shut for almost 60 days, which meant that despite continuing operational costs they earned much fewer revenues resulting in deficits that had to be bridged through new commercial loans.
“The additional costs about increasing debt servicing and corresponding significantly lower revenues have resulted in the network in its present state as being no longer sustainable.
“There are now limited funding options given that all of the group assets including properties and even personal property, homes of the sponsors/owners are mortgaged with the banks. Loans in billions have been taken to pay for salary and to help the team members not lose their jobs. The Jang Group has had a culture of being the last to fire people if at all. Geo Network is now faced with an existential crisis, something that can only be addressed by taking serious decisions to reduce costs.”
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