Capital FM has resorted to mass sacking after employees rejected a pay cut to keep the media house afloat.
In an internal memo seen by The Sharp Daily, Capital CEO Mary-Ann Musangi said the the company is operating in the red, and could collapse soon in case its financial burden is not reduced soon.
“From 2018 to date, the company has been making losses and our liabilities far exceed the revenues we have generated. The situation is so dire that we are not able to meet some of our critical financial obligations,” Ms Musangi said.
In a bid to company afloat, Musangi says she had approached the media house’s 112 employees to have their salaries reduced, but only seven agreed to the idea.
“Early 2022, our revenues started to improve and in April 2022 we reinstated full salary pay (after Covid-19 paycuts). This decision was based on continued growth of revenues enabling 100% salary pay – a commitment you as staff made to each other. Unfortunately, this action of reinstating 100% salary did not motivate the staff to continue driving the revenue targets and we have since witnessed a further slump in revenues which has put the company deeper in the red,” Musangi explained.
Read: Panic At Radio Africa Group As Management Announces Retrenchments
“The reality is that even after engaging in consultation with employees, only 7 members of staff out of 112 have consented to the proposed salary reductions. We are therefore unable to gain traction with this proposal put forward and in compliance with the Employment Act, we are left with no option but to defer the proposal and radically rethink the future of our business.”
Following the defiance by employees, Musangi hinted that the company will be forced to engage in a restructuring process, which will see a number of employees shown the door.
“This is therefore to inform you that we will not be implementing the proposed salary reductions with effect from this month, December 2022. But the fact remains – the company is in huge financial difficulty and cannot continue to operate under the current conditions. The options moving forward will involve a Restructuring of the business. Once we have defined the way forward, we will inform you on the next steps,” she said.
Capital joins The Nation Media Group, The Standard Media Group and the Radio Africa Group which are in the process of restructuring, as a result sending home a number of employees.
The media industry has been recording shrinking revenues, forcing the management of various outlets to reduce their staff numbers, a move which has seen big names being sent home.
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