KUALA LUMPUR (Sept 15): Star Media Group Bhd will be embarking on a retrenchment exercise to cut its headcount after its Mutual Separation Scheme (MSS) failed to yield the expected headcount reduction.

In an internal notice sighted by theedgemarkets.com, chief financial officer Sam Au said the retrenchment exercise will commence in the fourth quarter of this year (4Q20) and is expected to be completed within the same quarter.

Au said the group was conducting the exercise in order to meet its intended staff reduction targets. He noted that with its business significantly reduced, Star Media has to look at the necessity of operating with the same number of employees through all segments of its business.

Additionally, Au noted that the reorganisation of business operations and “the way work is performed” would also lead to redundancies.

“Redundancies will be decided based on need to cease functions/scope of work as well as a reduction in workload in business units due to contractions in business.

“While the Last-In-First-Out (LIFO) principle will be practised in line with requirements of collective agreements and laws currently in place, the company may, however, depart from this in cases where an employee’s performance is below the required level,” Au said.

Executives, managers and those in higher positions will receive a severance benefit of half of their last drawn salary for each year of employment or three months’ salary, whichever is higher. The notice stated that this supersedes any severance benefit terms contained in any previous documents issued by the company to the employee.

For non-executives (unionised employees), the payment terms will be as per the terms set out in the collective agreements Star Media has with the National Union of Newspaper Workers (NUNW) and National Union of Journalists (NUJ).

For the second quarter ended June 30, 2020 (2QFY20), the media group posted a net loss of RM26.95 million, from a net profit of RM1.66 million in the corresponding quarter last year owing to weaker performances from its print and digital segments.

Quarterly revenue fell 59.46% to RM31.51 million from RM77.73 million last year with all of its business segments registering lower income.

Star Media shares finished unchanged at 34.5 sen, valuing it at some RM254.80 million. It saw 116,900 shares traded.