ABS-CBN to start retrenchment by end of August, as franchise remains elusive

MANILA, Philippines — Network giant ABS-CBN will cease operating some of its businesses and start retrenching workers by the end of August, as its remains without a franchise to operate its free television and radio broadcasts.

In a statement on Wednesday, ABS-CBN said that the retrenchment program is the last resort to ensure that the rest of their workers still get employed, as they continue limited operations online and through other avenues.

“With the non-renewal of its congressional franchise, ABS-CBN is now forced to cease the operations of some of its businesses and implement a retrenchment program covering ABS-CBN and its subsidiaries effective end of business day on 31 August 2020,” the network said.

“As much as it hurts us to implement this retrenchment program, this is the only way to ensure the continued employment of the rest of our Kapamilya,” they added.

ABS-CBN assured its workers that they would do everything to “mitigate the pain” of losing jobs amid the COVID-19 pandemic, which has paralyzed most businesses in the country and has forced the Philippine economy to enter into a recession stage.

Aside from separation and retirement benefits, workers would also get a job placement program to help them find other jobs.

“We are doing all we can to mitigate the pain that will be felt by those affected, including paying out separation and retirement benefits and providing job placement programs,” ABS-CBN noted.

“The loss of their jobs comes at a time when the uncertain and perilous impact of the COVID-19 pandemic further makes our decision truly difficult, but inevitable,” they said.

ABS-CBN’s free television networks including its digital TV broadcasts, along with its AM and FM radio stations are still non-operation after the National Telecommunications issued a cease and desist order last May 5, after their old franchise expired.

The move was widely expected after lawmakers led by allies of President Duterte denied the company’s petition for a new franchise.

The network was seeking a new 25-year franchise but 70 members of the House committee on legislative franchises — including House of Representative officials acting as ex-officio members — voted in favor of a technical working group report junking their application.

In effect, ABS-CBN’s franchise is still hanging in limbo.

ABS-CBN was the country’s largest TV broadcaster only two months ago. Before it was told to shutter free-to-air broadcasts, the company reached an estimated 70 million viewers per week.

Its reach has diminished and forced to the more urban parts of the country where people have access to better internet or those who can afford pay television.

Its remaining businesses took a further hit after the NTC ordered it to stop its satellite TV service known as SkyDirect, which has over 1.5 million subscribers across the country. A separate NTC order that day closed down the company’s digital TV Channel 43 on the ABS-CBN TVPlus, affecting millions more users.

ABS-CBN previously announced it was losing about P1 billion per month with the closure of free-to-air broadcasts, its main source of earnings. On top operating expenses, it owes banks some P21 billion in long-term debt.

The NTC had previously allowed companies with lapsed franchises to continue airing while renewal was pending before Congress.

President Duterte’s earlier threatened to block the renewal of ABS-CBN’s franchise over unaired political ads during the 2016 elections. But administration critics and media advocates said the shutdown was aimed at silencing a powerful organization perceived as critical of the administration.

ABS-CBN’s management thanked their workers who have stayed with them through the years, adding that they are praying for them.

“For those who are affected, we pray for you and your families, that you may have the strength and guidance to deal with the challenges ahead.  For all that you have done for ABS-CBN, maraming salamat po,” ABS-CBN said.

JE