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After layoffs, it is pay-cut time at Bennett, Coleman & Co Ltd

17-March-2009
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After layoffs, it is pay-cut time at Bennett, Coleman & Co Ltd

Bennett, Coleman & Co Ltd (BCCL) has sent a reminder of sorts to anyone who may have forgotten that the Indian media industry is amid one of the worst slowdowns that it has seen in recent times. Ravi Dhariwal, CEO, Publishing, BCCL describes it as something that he has “not seen in his working life”. The BCCL has tightened all screws of its operations to further cut down on costs and simultaneously increase pressure on units that are not seen “profitable”.

As is known, earlier this year BCCL had begun various cost cutting initiatives that included the exit of a significant size of its staff. The other development that has come from the company is backward salary revision. In a mail sent to all BCCL employees, Dhariwal has informed them that there would be no salary revision and no (target variable pay) TVP pay out this year. Instead, there would be a roll-back of increment for all employees starting March 1, 2009. This would be graded, that is, employees who got a smaller increase would get a lower reduction and the employees who got a higher increase would have a higher reduction of increments.

A source from BCCL’s senior management has divulged that there are more changes at BCCL. The source informs that the company’s top management has signalled to all group company heads the possibility that if the units are not turned profitable by March 2010, they would either be folded up or hived off. The source said, “The Internet business and the OOH business are seeing some very tough times and this diktat would impact them first.”

In his mail to all employees on BCCL’s decision of salaries, Dhariwal also explained that BCCL had begun undertaking cost cutting initiatives as early as August 2008. He said: “Small cover price increase, rationalisation of pages, strictly incurring only necessary costs were our focus then. By doing these, we were able to keep ourselves profitable, though at a reduced level during the first three months of August, September and October. October was our best month in the history of BCCL in terms of revenue, though our profits were at half the level of what we had originally expected. All because of the higher newsprint costs. At that stage, we thought we will be able to cut more costs and restore the company to its original financial health.”

However, that was not the case. Dhariwal also said: “The last four months have turned out to be very challenging. Instead of growing in the previous three months, we saw advertising decline by almost a quarter.”

The focus on getting the ad bucks in is intensive at BCCL at present. Dhariwal said in the mail that “today, every advertisement is a battle won and every rupee earned is hard fought”. He explained, “Advertisers and agencies have simply cut their planned promotional budgets, a mistake in my opinion as advertising is the best way to ensure top of line growth…”.

Dhariwal divulged in the mail that BCCL was trying innovative approaches, including “integrated solutions of all the media that BCCL owns, to provide an effective solution to our advertisers." He added: “But each deal seems to require much more persuasion and does not bring as much revenue as it used to. I am confident that with our continuing innovations towards advertising sales, we would gain a competitive position, and when recovery does happen, and it inevitably will, we will be best placed to ride it.”

Also read:

Layoffs and cost cuts at BCCL as it prepares for a rough year ahead

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