A difficult time ... much doom and gloom news

In the past few days more and more companies have followed suit with news of mass retrenchments and reviewing of capex plans. Yesterday Rio Tinto (a major Australian mining company) announced that it would cut 14 000 jobs. Anglo is due to announce its capex review next week. Diamonds are stock piling around the world as companies like De Beers battle to sell the luxury product. On the local front, Lonmin has already announced the retrenchment of 5000 + workers. The price of steel has plummeted, and major steel manufacturer ArcelorMittal South Africa has extended the shutdown of its plants over the holiday period.

A recent survey by KPMG predicted that a third of South African employees will be retrenched next year. Although this year has been difficult, many take the view that we will only really start feeling the affects of the recession next year.

And its not just mining and commodities that are badly affected: a piece from today's Business Day reports on widespread job cuts across the newspaper industry as media houses face pressure to maintain profit levels. As Renee Bonorchis points out, this will result in increasing juniourisation in the industry as companies make shortsighted decisions on whose jobs to cut. For example, Jeremy Gordin, a respected Sunday Independent columnist, was recently retrenched. She sees this as shortsighted as she believes it is quality journalists like Gordin who draw readers to a newspaper. Firing him and keeping more junior writers will ultimately lead to the death of the industry.

On the flip side, this will lead to an increase in new media: blogs, websites and other platforms that are cheaper to run without the costs of printing, delivery, paper etc.

An important part of my job is to keep tabs on the news and what's going on in the world. It's an exciting time to be doing this as things are changing - the credit crisis is forcing people and companies to review their old ways of doing things. Although it all seems to be doom and gloom news at the moment, I also enjoy knowing that I am able to hold an intelligent conversation at a dinner party - I am amazed at how much I've learnt in a year and a half! Our daily morning newspaper sessions during our World of Work course stood me in good stead for the work I'm doing now.


Business Day column below.

The human spirit under fire at the end of a difficult year
Renée Bonorchis
11 Dec 08
THIS is my last column for the year. By the time this column appears again next year, a number of my colleagues at various publishing houses may be out of a job. At Primedia (which owns the likes of 702 Talk Radio and Highveld Stereo) there’s a hiring freeze, no end-of-year parties and little or no bonuses. At Avusa (the company I work for) bonuses have been cut, all entertainment and travel expenses have been wiped out, but as yet there’s no serious talk of retrenchment. But over at Naspers, with publications such as Beeld and Rapport, the letters for voluntary retrenchment have gone out and if 20% or more of the staff don’t take those packages, then some will be getting the chop on January 5. Lovely timing, don’t you think? But the company that really takes the cake has got to be Independent Newspapers. I should declare that I worked for this company for eight years. It runs titles such as the Star, the Cape Times, Business Report and the Pretoria News. Last week it sent out letters offering certain production staff voluntary retrenchment. At the same time the news broke that one of Independent’s best writers, Jeremy Gordin, had been retrenched. Gordin is an experienced political reporter and he writes like a dream. You’d think that he’s just the kind of person you’d want to hold on to in tough times because he’s the kind of writer that keeps readers interested, but no, the talk is he was axed because he’s expensive.This kind of shortsighted thinking on the part of management was evidenced again in the retrenchment letters that Independent sent out to staff across the country. The company wants to amalgamate its production people so that instead of having specialists working on specialist titles such as Business Report, it will have one long production line with financial copy editors struggling with sports articles and senior copy editors being demoted to mere cogs in the wheel.
From those copy editors (also known in SA as sub-editors) Independent wants to get rid of 15 of the most senior of them in Gauteng alone. In Durban and Cape Town, another four or five of the most senior people must go. Junior staff are not up for the chop because they’re cheaper to employ. And Independent’s overabundance of extremely senior staff, who hide in wood-panelled offices up on the top floors and appear to do very little, are certainly not facing retrenchment. The message being sent out is that the quality of the papers is expendable. A newspaper, it would appear, has become a fast-moving consumer good, not much different from a can of baked beans. The old hacks may sneer at my idealism in thinking that a paper is anything more than a consumable, but dammit, why shouldn’t we be idealistic about the press, that vital pillar of our democracy? Why shouldn’t we expect the papers that we read every day to strive to give us the best news, the best writers, the best pictures, the best designs? And why shouldn’t anyone expect that, if you work hard and get to the top of your game and put up with the good and the bad from the company you work for, you’ll be rewarded for it rather than kicked out because you tried too hard to do well? It’s this kind of rubbish that breaks the human spirit. It’s this kind of mismanagement that destroys newspapers and companies and reputations. During the year I have spoken to countless businesses in SA about job losses and how to deal with the economic downturn and there are three main ways that they have viewed the situation. Some have said it’s now that you need to keep your best staff — while others downsize, the bullish types can take market share and be well positioned for the upturn. Option two was to do with allowing natural attrition to slim the head count for at least the past six months and using training programmes to re-skill certain staff and redeploy them into other areas of the business.
Option three was carefully thought through retrenchments that were often started well before December and involved departments that would not impact on the business’s ability to offer customers the best service possible. As you’ll notice, Independent’s strategy doesn’t appear to fall into any of the above categories. Part of the problem may be that Independent answers to bosses in the UK and, with the rand having weakened, those bosses want their returns even if it means hacking the local company to pieces. Independent may be a prime example of how not to run a sustainable business. So this month I’m going to worry about my friends at other publications; I’m going to worry about the future of journalism in SA; I’m going to worry that too many companies have learnt nothing about survival; I’m going to worry that yet again people have become the expendable components in a downturn; I’m going to worry that all the talk about social responsibility and sustainability means nothing when cash flows are tight; I’m going to worry that companies use and abuse their staff and that, even with our progressive labour laws, it never seems to stop; I’m going to worry that despite the world suffering through a tough year together, we’ve come no closer to finding a collective solution that helps people rather than hurts them. On that note I’m not so sure I can wish you a happy holiday. But I do wish you health, wealth and prosperity. Till next time.