Ferial Haffajee
The Independent Newspaper group’s golden boy, Shaun Johnson, has stepped down from his executive position to become a specialist writer for its 14 newspaper titles.
Johnson’s move has come at the same time as unprecedented trouble at the Irish-owned media group, but he swears that the timing is coincidental. “There are some people who will never be anything but writers,” said Johnson this week, adding that his move had been prompted by an offer from chief executive Ivan Fallon.
Great unhappiness and low morale are stalking Independent Newspapers, where there will be large-scale job cuts and staff will not get their full Christmas bonuses for the first time. Although the local subsidiary is not making a loss, the parent company in Dublin is headed for a profit squeeze. The London Sunday Times reported that the Independent Newspaper group’s brokers have slashed their profit forecast and that billionaire Tony O’Reilly’s global interests in New Zealand and South African interests had fuelled the cut.
Consequently, there is pressure on local executives to trim even more fat from the local operation which has been turned around from its years as the lumbering loss-making Argus operation owned by Anglo American.
In the hard times, power has swung away from the editors to what one director calls “The MBAs in the newsroom”- the executives who are concerned with little other than the bottom line.
It is in this atmosphere that Johnson chose a move from the boardroom back to the news room. Other editors are said to be unhappy with the cuts, including a decision to close the Washington and London bureaus and to spirit away the R1,5-million saving instead of spending it on reporting this continent more consistently. Under O’Reilly, the group’s editors now report to the managing director instead of the board.
Staff numbers have been cut by hundreds since Independent Newspapers bought the company in 1994 and scores of other jobs will go either by way of voluntary or forced retrenchments or early retirement.
Locally, Fallon said stringent anti-tobacco advertising legislation could put his group in line for a potential R13-million loss in advertising revenue, while the steep hike in interest rates would cut into the group’s revenue targets which are set in Dublin. The tumbling rand has also put pressure on O’Reilly’s profits, which are calculated in the very strong Irish punt.
The move was pre-emptive and meant to ward off a newspaper recession, said Fallon, adding: “We want to be as low-cost, lean and mean as possible.”
Last year, O’Reilly’s South African operation contributed about R200-million to group profits, but Irish analysts say this does not come close to recouping what the baked beans king has spent on his foreign forays.
Said an Irish investor: “He [O’Reilly] might have better deployed his money here [Ireland], where the economy is going from strength to strength.”
In South Africa the group, which has increasingly become an establishment voice close to the government, has set itself up as a front runner and big spender in the transformation of the media.
Earlier this year, O’Reilly was awarded an honorary doctorate from Rhodes University’s journalism department and the magnate has also funded a university chair in media transformation.
Yet the group is now at loggerheads with trade unions who have threatened to declare a dispute about the manner in which the company announced the job cuts.
Fallon has quashed rumours that titles will be closed and he has reiterated O’Reilly’s support for South Africa. He said: “We will continue to invest heavily in training and executive development and we will continue to recruit.”
Trade union representatives allege that they were “ambushed” by management at a meeting on October 29. What they thought was going to be a routine meeting became a shocker where details of job cuts were revealed.
Parallel to this meeting, middle managers held smaller meetings telling staff in loss-making operations that they should start looking for other jobs.
“Never mind labour relations, it’s just bloody bad manners,” said a shop steward from the largely black Media Workers Association of South Africa (Mwasa), whose members will be worst affected by the job cuts.
Mwasa has accused the company of profiteering, while the South African Union of Journalists said Independent Newspapers was “hiding behind the fig leaf of Johannesburg Stock Exchange rules” by not disclosing financial information to enable the union to consider whether trading conditions are as tough as management believes.