- Group CEO Mark Lee says advertising, television broadcasting, newspapers and other media have been adversely affected by ongoing protests
- He says the affected employees will be informed by this year and will be granted a bonus equivalent to half a month’s salary, along with other statutory payments
Hong Kong's dominant free-to-air broadcaster Television Broadcasts Limited (TVB) is trying to cut heavy losses after months of anti-government protests by laying off 350 employees, or 10 per cent of its workforce, while a management reshuffle at the top is also expected.
In an internal statement sent to its staff on Monday, TVB group CEO Mark Lee Po-on quashed rumours the loss-making company would axe some 1,000 employees, but revealed that the figure would be 10 per cent of its workforce, excluding artists.
The broadcaster slipped into its first net loss in a decade, at a net loss of HK$199 million (US$25.3 million) compared with a net profit of HK$243.6 million in 2017, due to a write-off on bond holdings issued by Chinese theatre operator SMI Holdings Group.
A source familiar with the situation said TVB chairman Charles Chan Kwok-keung was expected to step down next year after the US$106-million loss arising from the bond investments was revealed in May.
Last year, TVB was forced to write off HK$500 million from its exposure to the default of the secured and unsecured bonds it bought earlier in the year.
Hong Kong's largest television broadcaster TVB defends neutrality of news coverage
About four months after the broadcaster's purchase, SMI's financial troubles surfaced with HK$300 million outstanding in salaries and cinema rents and 150 million yuan (US$21.7 million) for unpaid licensing fees. SMI is a Hong Kong-based producer and distributor of movies and television dramas and one of the two major shareholders of cinema operator Chengdu Runyun Culture Broadcasting.
Francis Lun Sheung-nim, CEO of brokerage GEO Securities, said Chan should already have stepped down for the investment blunder.
"It is long overdue," he said.
A TVB spokeswoman said any change in directors would be announced in accordance with the listing rules.
Lun said the prospect of electronic media remained difficult partly due to competition from the Internet.
TVB's Lee said the company's lay-off arose from the re-engineering of certain parts of business process to raise efficiency, amid uncertainty brought about by the anti-government protests and recession.
He said advertising, television broadcasting, newspapers and other media did not escape unscathed from the protests, which have dragged on for more than six months and dealt a heavy blow to tourism, food and catering, and retail industries.
"The uncertain outlook of Hong Kong is the most worrying," Lee said in the memo. "The social unrest shows no signs of abating. It is impossible to predict when social order will be restored and the economy will recover. In the face of this severe situation, all enterprises must take appropriate measures to ensure the business sustainability and retain core capabilities."
He promised to inform the staff to be laid off by the end of this year at the latest. He also said the company would compensate the employees with payment in lieu of notice and a special gratuity payment according to labour law.
The affected employees would be granted a discretionary bonus equivalent to half a month's salary, while those promoted would get a performance-linked pay rise, he said.
TVB warns employees against actions that would 'impose one's political inclination on work'
Since June, Hong Kong has plunged into chaos triggered by the now-withdrawn extradition bill. It has since ballooned into a broad anti-government movement.
TVB has been unpopular with radical anti-government protesters, who criticised the station's news coverage as too conservative and not critical enough of the administration, a charge its management threw out saying its news reporting had always been impartial, professional and objective.
In October, the station applied for an injunction to ban anyone from assaulting camera crew and damaging its facilities and news vans.
During the summer of 2019, TVB lost some global brand advertisers " such as Pocari Sweat, the Japanese sports drink, and Pizza Hut, the American restaurant chain " after online calls to boycott the broadcaster for its "pro-Beijing stance".
On Monday, TVB shares fell 12 cents or 1 per cent to HK$11.88.
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