During a week in which all of Brazil’s newspapers gave prominent play to the results of data that show a decline in unemployment, recovery of incomes and strong optimism by business owners about the direction of the Brazilian economy, Folha da Manh, the company which publishes Folha, did the opposite and executed the biggest cut in employees since the crisis began more than two years ago, due to the explosion of 290 million reals (US $95 million at the current exchange rate) in debt.
Folha did not even report its own dismissals.
It’s not the first cut that the newspaper has made, nor is it the only media company to do so. But this “adjustment” to use the favorite word of consultants, has its own characteristics that should be analyzed. First came the numbers and information at its disposal, before the official confirmation.
The dimension
During the week, about 200 out of nearly 1,300 employees were dismissed, which meant an 18ut in the payrolls.
In the Folha newsroom, Folha Magazine, Folha Online, the Folha news agency, in regional sections, the archives, and the daily newspaper Agora, they totaled 85 people, 60 of them journalists.
In the Folha newsroom, the main one at the company, 35 journalists were dismissed and some columnists were subcontracted. Not all the positions will be eliminated: 13 new employees will be hired, but at much lower salaries.
Unlike other cuts, these ones affected the newspaper’s elite. Five editors were laid off, an unprecedented fact in the history of Folha if you consider only cuts for financial reasons. Among those dismissed (now or in the near future), several journalists have more than 20 years on the job or have specialties in complex areas, such as science, health or economics.
The cuts eliminated a product, the regional section in Campinas, and affected the internal quality program, one of the pillars, along with the training program, which plans efforts to improve the newspaper.
The quality program, implanted in 1996, was responsible for the daily control of grammatical mistakes, standardization and digitalizing. All of these employees were dismissed or transferred, and control will be carried out in a selective way.
The impact of measures is bigger because it is based on other cuts in spending, personnel and products done since the start of 2002.
“Readers should pay attention, demand quality and balance”
The reasons
Why are there more of these cuts, after so many others and at a time when the Brazilian economy seems to be moving out of stagnation?
Folha did not say.
I received the following written statement from Editor-in-Chief Otavio Frias Filho: “We regret the loss of valuable professionals, many of them with a long history of dedication to the newspaper. These were difficult, but necessary, measures to guarantee the newspaper’s ability to more rapidly overcome these adverse conditions – and do it without risking editorial independence.”
There are two possible hypotheses for the cuts.
The first, a strong internal adjustment to prepare the company for the entry of a foreign partner, such as the one that just occurred at the Abril group (publisher of Brazil’s biggest weekly news magazine, Veja), which sold 13.80f its stock to U.S. investment funds.
The other hypothesis is, in reality, the reason presented unofficially by the newspaper’s management in conversations with some of the dismissed employees and with editors who remained. The company had to take these steps to speed up liquidation of the newspaper’s debt. The distinction is important: The group’s debt is 290 million reals, according to a story published Feb. 15 in Folha. But the newspaper’s debt is smaller, at 160 million reals.
There is talk that the newspaper’s profits are high (17%) and that interest (200f the debt per year) is being paid, but the pace of paying the debt is slow and threatening.
What the company intends to do, therefore, with these cuts, from what was possible to gather in diverse areas of the newspaper, if financial results are better this year, it might shorten the period being called “crossing the desert” internally.
The dismissals occurred after the consulting company Integration, with offices in So Paulo and Rio, worked for two months at the company. Earlier, the newspaper unsuccessfully tried to sell assets and went through the experience of negotiations, frustrated up to now by BNDES, the national development bank.
“O Estado de So Paulo”, Folha’s major competitor, and Abril also contracted consultants, but they made their adjustments over longer periods, not such an abrupt way as Folha did. After the cuts and changes that were introduced last year, “Estado” had better financial results than Folha.
The future
What will happen at Folha? It will continue to produce the newspaper that it has promised – informative, critical, pluralistic, nonpartisan, modern, indispensable – with fewer people and reduced editorial space. The product that it has been making is already irregular. The flattening of salaries that has occurred and the loss of specialized and experienced journalists will have consequences. Readers should pay attention, demanding quality and balance.
There is another negative aspect in this episode, that is silence by the newspaper. Why has it not reported its own dismissals?
The newspaper, which has an obligation to demand information about crises in public and private entities, chose not to make any official statement, and that is a mistake.
Society demands, increasingly and appropriately, transparency by news media. The financial health of newspapers interests their readers because independence and credibility are threatened at these publications they choose to buy for information and interaction.
Slaves and spies
During the week it experienced its worst crisis, Folha published two of its best stories of the year.
On Sunday, July 18, reporter Elvira Lobato wrote the newspaper’s headline “Modern farm work still uses slaves.” While slave labor is not a new topic, the story managed to show, through
the use of unpublished information and research in the state of Par in the Amazon region, where agriculture and fisheries are most advanced, dedicated to industrialization and exports, that they still benefit from this aberration.
On Thursday, July 22, the editor of the business section, Mrcio Aith, reported that members of the top levels of the federal government have been working as spies for a private company, Kroll. The two stories were done by two of the most experienced journalists at the newspaper.
