During the 2017 Chief Executive Election, Carrie Lam attended the Chief Executive Candidate Question and Answer Session organized by the Hong Kong Journalist Association (HKJA). The author was also present at the event and asked Carrie Lam about the possibility of massive layoffs by the new buyer after the sale of i-Cable Communications. Disappointingly, this Chief Executive candidate, who has been a government official for decades, just thought that corporate layoffs are a matter of the private market, and it is difficult for the government to intervene.

In April 2017, the acquisition of i-Cable was completed with Forever Top (Asia) and New World Development as the company’s new major shareholders, however, there have been continuous layoffs since the takeover. Earlier this week, the cable television provider announced that they would be firing 40 employees from the news department. This sparked an uproar among some staff in the news department, prompting the resignation of the team heads of local, international, China, and sports news.

The massive layoff this round has obviously brought a lot of criticism, especially the firing of the entire team of the award-winning investigative journalism program “News Lancet.” The move was really confusing. i-Cable News had been widely popular for several years with “News Lancet” as the channel’s most favorite program, therefore, killing off a segment that can attract consumers is suicidal. Given the i-Cable’s current declining subscriber count, it is going to be difficult to stop the bleeding.

Television production is all about quality. Operation difficulties cannot be solved by making staff redundant or restructuring the organization because constantly cutting production costs will only reduce the quality of the programs, ultimately driving customers away and losing a large number of subscribers. If you have noticed, since Forever Top (Asia) and New World Development took over, the number of employees has dropped from about 2,000 to the current 1,300, but the number of subscribers has declined by 100,000. Over the past three years, the company has been a loss-making business every year. This proves that by cutting costs without improving program quality to attract subscribers, i-Cable has embarked on a path of no return.

The media ecosystem has undergone drastic changes where the survival of the fittest is the way to success. You only need to look at the fact that many western newspapers no longer rely solely on sales and advertising as their main source of income but have added the subscriber model a few years ago to show that this way of expanding revenue is the only way to survive. It is true that newspapers always put quality first. Without quality reporting and commentary, it is impossible to attract a large number of subscribers. This cause-and-effect relationship is simple to see.

I-Cable senior managers Edna Tse, Hui Fong-fai, Oscar Lee and Anderson Chan said in a written statement that “The purpose of the restructure was to let the newsroom achieve manpower and resource sharing, thereby strengthening interdepartmental collaboration and increasing flexibility in deployment. They will continue to produce quality news coverage and public services programs through this new operation mode.” The author is really puzzled. With the elimination of the popular program “News Lancet,” the resignation of the entire China news team, and the departure of 60% of the local news team, how can the four top executives continue to maintain production quality in the newsroom? Based on the above explanations provided by the four managers, it is obviously contrary to the way of survival of the media, not to mention the effective operation of a news company!

Judging from this i-Cable restructuring incident, I believe there will be more resignations to come. Eventually, the four senior executives may have to put aside their pride and report the news themselves.

(Kwan Cheuk Chiu, economist, director of ACE Centre for Business and Economic Research)

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