Bitter Medicine: Why cost-cutting in government and companies can be essential for a healthy future

Dear DM168 readers,

Daily Maverick CEO Styli Charalambous had the unenviable task this week of announcing cost-cutting measures that have had to be implemented because our expenses surpass our income. 

In both business and government, personnel costs make up the biggest chunk of expenses. Without cost-cutting or rightsizing we face bigger dangers further down the line – debt defaulting, bankruptcy or insolvency, jeopardising the whole organisation, its purpose and its future. 

Too few people understand this. 

Education Cost-Cuts

Our lead story in DM168 this week, by journalists Naledi Sikhakhane, Lisakanya Venna and Ed Stoddard, explains why provincial education departments are being forced to cut spending.

Last year, the national government agreed to across-the-board 7.5% salary increases for civil servants. As a result, several provincial education departments have to decide by the end of this month whether to sacrifice teaching posts, school feeding schemes or learner transport to make up for the budget deficit caused by the salary increases.

These very essential services that the government is meant to provide to learners are in jeopardy because the salary increases were not budgeted for, as the minister of finance warned at the time. The chickens are coming home to roost.

The trauma of retrenchment

I am sure those of you who have been through retrenchment and restructuring know full well how traumatic this is – for beloved colleagues whose jobs are at risk, and for the colleagues who have to make the tough decision to cut the livelihoods of people whose personal circumstances they know intimately. 

As difficult, emotionally fraught and contested as the decisions may be, the cuts have to be made for organisations to be rightsized for sustainability. 

It’s like going back to living frugally on your salary after subsidising monthly expenses by maxing out your credit card and clocking up debt. The medicine you need to get back to financial health is bitter. Cutting up your credit card. Settling debt. Paying off personal loans. Living within your means. Belt-tightening. Your income needs to cover the expenses going out.

And so it is with the government. And companies. 

News media job bloodbath

Traumatically, many of us in the media industry have been through cost-cutting and downsizing at previous employers – some of us as many as four to five times. Fortunately, this is the first time Daily Maverick has needed to do this since it launched 15 years ago. We all hope that, by restructuring for our future sustainability, this will be our last.

But as our CEO explained to the Competition Commission, our industry is spinning in the vortex of a market crisis. My colleagues at Media24’s City Press, Rapport, Beeld and Daily Sun, and Independent Media face the same onerous burden. In the case of Media24, more than 300 jobs are at stake, pending a Competition Commission ruling.

Why is this media job bloodbath happening? Newspaper cover prices and advertising, especially brand advertising, used to pay for journalism. Now global tech giants like Google, Facebook and TikTok take the lion’s share of online advertising. Most consumers prefer to read their news free of charge from several sources on their cell phones. Increasingly, misinformation and disinformation are what they get for nothing. In large doses every nanosecond.

Credible news versus Disinformation

All credible news brands worldwide that spend huge amounts of time and money paying journalists to seek truth and verify information are drowned out by this cacophony of social media opinions and trolls. 

Even though we are duty-bound to shed light on the things that those in power want to keep in the dark, sometimes the truth hurts. It doesn’t just hurt those we expose for malfeasance. (Actually, sometimes I am not sure about truth hurting the ethically compromised so much – because in our very own Parliament, we have a veritable gallery of rogues and the crooked seem to be able to pay their way out of orange overalls or accountability ).  

I mean that sometimes the way that we hammer the truth home also hurts our audiences, our readers, our online users. There is news fatigue and information overload. Watching a funny YouTube, TikTok or Instagram cat video is just easier on the eye. Because the truth we journalists share is murky. Ugly. Difficult to understand. Taxing on our mental health. And our precious time. Maybe we journalists need to get more to grips with this reality that our audiences face.

Change is Pain

We need to adapt to a changed media ecosystem and serve readers their news where they want it, in a way that is easier to understand and grasp while staying true to our guiding lights. 

Perhaps the message from our market crisis also requires us to introspect more about our inherent biases – what in the world we choose to reflect on and what we ignore. 

Too often what we neglect to reflect as a counterpoint to the horror, greed and prejudice of the worst of us,  is the beauty, resilience, kindness and hope of the best of us. I believe they outnumber the worst by far. 

I am thinking of the people who are dedicated to catching the thieves and crooks, fixing the potholes and turning around governments to serve the people, finding solutions to big hairy problems, and doing something every day to make our country and world a more decent place to live in. The care-givers and carers. The cleaners. The artists. Musicians. Poets. Sportsmen and women. The gardeners and farmers. The teachers and learners.

Change is pain. But often from pain comes the introspection and reset we need to be better. This is a tough time for us. But together I know we can forge a more stable path. Here at Daily Maverick. And in South Africa.

My favourite reads in DM168 this week.

My most inspiring story in this week’s DM168 is by arts writer Keith Bain, who caught up with the phenomenal dancer and choreographer Mthuthuzeli November, one of the most sought-after voices in contemporary ballet globally who brings new work to the Baxter Theatre in Cape Town from September 21 to 28.

Above: Mthuthuzeli November in rehearsal with Cape Ballet Africa (Photo Helena Fagan)

Kids enjoy the new robot figures in Muizenberg on Wednesday, 11 September. (Photo: Joyrene Kramer)