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Even Grupo Globo will not be left unscathed by the impending collapse of most media outlets, hampered by the drop in advertising revenue as a result of the new coronavirus pandemic. This Thursday (23), an internal statement made by the executive Frederic Kachar triggered the crisis in the printed arm of the company, Globo Publishing.
In the extensive text distributed to employees of publications such as the O Globo newspaper and Época magazine, the general director of print media for the Globo Group says that the impact of the pandemic on the market was “very fast and devastating” and communicated to employees to be adopted. “Deeper Cost Adjustment Measures”.
Later, Kachar confirms that Editora Globo has decided to adopt the effects of Provisional Measure 936, that is, it will reduce working hours and wages of employees by 25% for three months. In addition, there is also the possibility of suspension of the contract.
A Leo Dias column He discovered that similar measures should be taken in the other arms of the Globo Group, such as the open television station and the programmer Globosat. Some members of the group, by the way, have already adopted these measures: this is the case of Rede Bahia and NSC, for example.
Read the complete letter sent by Frederic Kachar to Editora Globo’s collaborators:
“Dear,
As you know, we face an unprecedented challenge for our generation. The new coronavirus pandemic is affecting everything and everyone in a profound and structural way. We have several questions and very few answers. However, one thing seems clear to me: the world has changed and the resumption, which we still do not know when and how it will take place, will be towards a new normality.
What does this mean for our company?
Many things. The most important of these is that the speed with which we have been transforming our business in order to become a media technology will have to grow a lot. The deadlines that we had set ourselves to achieve the objectives of this trip were definitely shortened.
In this regard, we were experiencing a promising period in the six months before the pandemic broke out. We had a last quarter in 2019 with relatively stable income and much better results than the rest of the year. We started 2020 at an even better pace, which gave us the best first quarter in recent years.
We are reaping the rewards of what we have planted so far, reinforcing the path of transformation we have been seeking since 2015.
However, the impact of the pandemic is very rapid and devastating, despite all the efforts of our journalism, which have resulted in audience records and other areas to keep our operation running, even if working remotely.
In March, the effects were still under control, but in April we already faced significant and worrying declines in our income. With the exception of digital subscriptions, which still do not have a relevant weight in total revenues, but whose growth has accelerated even more since the beginning of the crisis, which reinforces that we are on the right track, all the other channels are experiencing steep drops. Mainly advertising, which is still the most representative part of total revenue and the cornerstone of our result.
Unfortunately, the short-term horizon is not promising. Not only because confinement does not have a defined deadline, but mainly because the impact on the financial health of consumers and advertisers is already real. And their habits are already changing. Here and in the world.
Faced with an emergency scenario like the one we have now, unfortunately we have no way of avoiding the cost overhaul to try to minimally restore an operating balance. Also in March, we began to renegotiate all of our supplier contracts. There is not a single expense that is not being reviewed.
However, this is insufficient. We are a service company, where payroll represents more than half the cost. We have already implemented immediate actions, such as the use of the hour bank, the application of compulsory vacations and the freezing of admissions and internal movements.
Even so, given the scenario in terms of income, it is necessary to take deeper measures to adjust costs. In view of the few alternatives we have, I believe that the most appropriate at the moment, and taking into account our recent history, is the adherence to Provisional Measure 936.
The first range of workload and salary reduction stipulated by this MP, set at 25%, for all employees in all areas, hierarchical levels and functions, will give us an additional respite for the most difficult part of the crossing and, Mainly, to take the necessary measures to accelerate the transformation of our products and recipes.
According to the provisions of the MP itself, the government will supplement the income owed to each worker, and this process is automatic (deposit made into the employee’s account after the communication of RR. The benefits will be maintained in full. In some cases, Occasionally evaluated, we will apply the suspension of the employment contract, also provided in the MP.
We are providing an exclusive HR channel for general questions and topics on the subject.
If, on the one hand, it is frustrating to take these steps after a reasonable sequence of difficult months in our journey, on the other hand we have to see that we are stronger than ever to face a challenge of this magnitude.
This is the result of the talent, commitment and passion that we have for our business. I believe that we will strengthen ourselves with this crossing and we will resume, in 2020, the trajectory that we had been building. We will remain firm and motivated in the search for answers to the many questions we have about the future of society, the economy and journalism.
Our mission as a newspaper company is at its peak in recent decades. We are more important than ever to society. We need to ensure the best coverage of the facts, assuring our entire audience with information and knowledge to deal with these new rules.
Our business areas continue to seek media solutions for our advertisers, ensuring that the impact of the messages delivered to our readers is positive for their businesses, which also face this challenge.
Thanks to everyone beforehand. Count on me and the other directors. Protect your families in this delicate moment. The cohesion and complicity between us will grow a lot in the coming months.
I am still optimistic about our company. With work, enthusiasm, discipline and talent we will overcome this challenge. “
