Due to the impact of the coronavirus pandemic on advertising and circulation revenue, both Independent Media and African News Agency (ANA) will implement salary cuts, they said in a joint-statement on Saturday afternoon.
The news was conveyed to staff at both organisations on Friday.
The highest earners will be required to sacrifice the biggest percentage reduction in salary, while the lowest earners will be the least affected.
"Circumstances will be continuously monitored and assessed with interventions modified according to the business environment and business impact," according to the statement.
Fin24 reported on Friday that ANA has announced possible salary cuts of up to 45% for its employees, linked to a slump in business due to the impact of the coronavirus.
The media entity, which was launched in 2015 by Iqbal Survé, who is chair of Sekunjalo, executive chair of Independent Media, and also chair of ANA, followed the liquidation of the South African Press Agency (Sapa).
Independent Media South Africa publishes, among others, The Star and Cape Times, and is one of ANA's major clients.
According to a notice to staff seen by Fin24 on Friday, the drastic cuts would apply to ANA employees across the board. The company cited a drop in advertising revenue as clients scaled down on spending or cancelled bookings in the wake of the coronavirus lockdown.
"Over the last week, we have seen an increase in the rate of cancellation of advertising bookings that had been previously committed," read the note signed by CEO Vasantha Angamuthu.
The company said salary cuts would come into effect from April, and until the situation stabilises.
"Our payroll bill is one of our highest expenditures. Unfortunately, we are left with no alternative but to take the extreme measure of applying a salary reduction," it said.
It highlighted that the financial pressures faced by its biggest clients, namely Independent Media, ANAPictures and IOL, had a significant impact on its business.
A possible scenario for ANA employees on the lowest pay scale would be a 5% cut, while the worst case scenario for the higher band would be a 45% reduction.
'Can only hope'
"I can only hope the situation normalises soon and we can start planning for the world post-Covid-19," said Angamuthu.
Early indicators for April suggested the entity would miss revenue targets by as much as 40%- 60% in some sectors, he added.
According to the joint statement issued by Independent and ANA on Saturday, the salary cuts decision was not an easy one to make or take, "but both companies consider the move to be a necessary and responsible approach to safeguarding the employment of the approximate 2 000 personnel at these establishments".
Independent Media and ANA's senior management teams have already implemented several interventions to ensure the sustainability of these businesses during the Covid-19 crisis and beyond, according to the statement.
These include stringent cost reductions across the supplier chain, procurement, logistics, printing and syndication costs.
"It is also a proactive measure, as it is expected that media businesses, like many other businesses and industries, will be impacted for at least three to six months," the joint statement says.
"In making the necessary reforms now, Independent Media and ANA are preparing for the inevitability of a different working world post Covid-19, but one that we trust, will be sustainable for our companies and our staff."
Sekunjalo Investment Holdings has independently supported the operations of both companies and, according to the statement, will continue to do so during these challenging times.
"Dr Survé and the entire Sekunjalo Group, are highly appreciative of the efforts the executives at Independent and ANA have done to secure staff and the group stands united behind us," according to the joint-statment.
ANA and Independent Media are not the only media companies which have been impacted by dropping revenues, Last month, the Mail & Guardian revealed that it may not be able to pay its staff in April, as a result of dwindling advertising income due to the coronavirus.
Editor Khadija Patel said advertisers, which contribute about 70% to the paper's revenue, had been cancelling their campaigns, while the group's live events, which accounts for roughly 20% of its income, had "come to an abrupt halt".
The South African media landscape is facing a difficult period, due in part to a changing operating environment which has seen a shift in advertising patterns and content consumption.
Compiled by Sibongile Khumalo with additional reporting by Carin Smith