NMG turns to cost-cutting as virus pandemic hits advertising industry
Nation Media Group (NMG) has cut compensation for its board members and reduced salaries for its staff as it grapples with shrinking advertising sales and soaring costs amid coronavirus pandemic.
The company has slashed salaries for its employees earning Ksh50,000 and above a month. The salary cut ranges from 5% to 35% and takes effect from this month of May.
The director and staff pay cut is part of the measures NMG has taken to enable it keep its business running in an environment where spending on advertising has declined and companies face unexpected expenses because of the Covid-19 crisis.
NMG directors and staff are expected to remain on the reduced pay until the Covid-19 crisis is over and the company gets back on sound financial footing.
Virus outbreak hits advertising industry
The Covid-19 outbreak and the resulting government lockdown measures aimed at containing its spread have disrupted the economic and operating environments for businesses around the world.
Many businesses have closed and those that still operate have greatly scaled back their capacity.
Facing weak demand for their products and rising costs, many brands have stopped advertising or at least cut their marketing budgets to try to cope. NMG derives most of its revenue from advertising across its newspaper, television and radio operations.
Therefore, the drop in marketing spending by brands in this pandemic means a decline in advertising revenue for NMG. As a result, the company has had to look for ways to survive, leading to the pay cuts.
In addition to cost curtailment, NMG is also supporting efforts to combat Covid-19. The company has donated Ksh10 million in to a government-led fund that seeks to curb the spread of Covid-19 and reduce its impact on the economy.
NMG hopes its donation will help tackle the Covid-19 problem quickly to allow normalcy to return so as to limit the pandemic’s economic impact on its businesses.
NMG stock rose 0.23% on Monday to close at Ksh21.40.