KUALA LUMPUR (June 29): Media Prima Bhd said it had issued a notice letter to 300 employees who will be let go on July 31 as part of its business transformation plan.
In a statement, the media group said it, together with representatives of its five union groups, had concluded discussions on the execution of the next phase of the group’s business transformation plan that was announced earlier on June 4.
“The discussions aimed to ensure that the process is transparent and that all obligations to affected employees are given the utmost priority. All parties understood the need for the business transformation and agreed to the mechanism of fair and equitable compensation to affected employees as governed by the law, respective union collective agreements and employment contracts,” it said.
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.
These factors, it said, have compelled the group to expedite the next phase of its transformation exercise, which includes revising revenue models and corresponding cost management.
“It will involve operational changes at selected units to address cost inefficiencies arising from work duplication. The business transformation is aimed at landing the group on a robust and sustainable business model for the medium and long term,” it said.
This will be the second retrenchment exercise for the media group after the retrenchment of 543 staff at Media Prima’s publication group New Straits Times Press (NSTP) last March.
In a June 3 report, CGS-CIMB Research said Media Prima’s mass layoffs which took place between December 2019 and March this year had reduced its headcount by just under 1,000 people, or about 26%, from 3,867 employees as at end-2018.
“Its headcount peaked at 4,793 in financial year 2010 (FY10). In FY14, it conducted its first mass layoffs that pushed down its staff strength to below 4,200,” it wrote.
CGS-CIMB Research then added that it may have to review its forecasts for Media Prima once the group confirms whether it is indeed going for another round of mass layoffs. It has an "add" call on the counter, with a target price of 19 sen, valuing the stock at 0.5 times its FY21 price to book value.