The Standard Media Group will next month undergo another round of restructuring as it attempts to turn its fortunes around following years of making losses.
Acting Chief Executive Officer Joe Munene has this evening informed staff at Kenya’s oldest media house that a number of them will be laid off.
“Some of the desicions we must now make are going to affect the employment status of some staff members as well as some of our product offerings,” said Munene in an internal memo to employees.
The Standard group has for the last two years been unable to pay its staff on time due to cash flow problems.
The company has already defaulted on sacco contributions and statutory payments such as NHIF and NSSF despite deducting the money from its employees.
A number of staff, fed up with the uncertainty at the media house, have quit over the past few months.
Today, Assignments Editor Nzau Musau became the latest employee to quit the Moi family owned media house.
It is still unclear when and how the media house will turn a corner as the company has consistently posted losses for over five years now.
The company, which runs Kenya’s second biggest newspaper The Standard, had its loss balloon to Ksh1 billion for the period ending December 2022, from just Ksh22 million in 2021. It’s the biggest loss in its over 120-year history.
The problem, according to insiders was a spending spree overseen by former CEO Orlando Lyomu who launched several products like Spice Fm, Vybes Radio, KTN Burudani, KTN News and even Farmers TV.
This is not to mention the fact that it moved its journalists from Mombasa Road to I & M building in town and then back to Mombasa road at a huge cost within a space of three years.
The chicken have now come home to roost. A care taker committee appointed in June has proposed shutting down a number of the company’s loss making products.
Sources say that among the products being considered is ‘The Nairobian’ newspaper, Farmers TV, Vybes Radio, KTN Burudani and Farmers TV.
Although the final desicion is yet to be made, the choice to shut down ‘The Nairobian’ is almost certain. The weekly tabloid has never made a profit over the last decade as very few people and companies willing to advertise in it.
On the contrary, the newspaper has lost the company hundreds of millions in legal suits. Worse, the cost of newsprint has risen tremendously over the last few years due to the weak shilling which has made production of the paper expensive.
If the Nairobian shuts down, it will be the first mainstream newspaper to be taken off the stands in five years after Nairobi News in 2015.
