Hong Kong (CNN Business)The biggest television broadcaster in Hong Kong is cutting staff as the city plunges into recession and its political crisis continues with “no sign of abating,” the company’s CEO told workers this week.
Television Broadcasts Limited (TVB) — which has 3,500 employees, not counting actors and TV hosts — will make the cuts, which will affect 10% of the workforce, to help with costs, CEO Mark Lee Po On wrote in a letter to the staff this week. TVB provided a copy of the letter to CNN Business.
He pointed out that protests in the city have lasted for more than half a year, taking a heavy toll on tourism, retail and other markets.
“Recession is a foregone conclusion,” Lee added. “No business sector including advertising, television, newspaper and other media will be spared.”
The economy slowed more dramatically than expected in the third quarter, pushing Hong Kong into its first recession since 2009. And the Hong Kong government warned last month that the protests will cause the Asian financial hub’s economy to shrink by 1.3% this year, marking the first year of recession since the global financial crisis a decade ago. The pro-democracy protests, a synchronized global economy slowdown, and trade tensions between the United States and China are all contributing to the problems.
In his letter, Lee said that Hong Kong’s “uncertain outlook” was “worrying.”
“It is impossible to predict when social order will be restored and the economy will recover,” he said, adding that companies must now work to sustain their businesses.
Lee said that the affected staff will be informed as soon as possible and will receive some form of severance pay or other compensation. Unaffected staff will receive discretionary bonuses.
The broadcaster still has plans to speed up business development in mainland China, Lee said, which he added will provide “new development opportunities.” The company also plans to roll out new products in Southeast Asia and North America.
TVB has also found itself a source of controversy during the protests. The broadcaster has been criticized by protesters for what they see as pro-government bias, the New York Times reported in July. The company said that month that it has “always maintained neutrality, professionalism and objectivity in its news coverage.”
In his letter, Lee said that because many people have stayed home for the past six months, TVB has experienced an “upswing” in ratings.
TVB is traded publicly in Hong Kong. It closed up 0.7% on Tuesday.
The local economy has been hit hard by the protests, which are driving away visitors. On Sunday, for example, Hong Kong International Airport reported that the number of passengers who passed through the airport plunged by 16.2% in November compared to a year earlier. That’s nearly one million people.
Hong Kong Financial Secretary Paul Chan also said Sunday that he is worried international investors will lose patience with Hong Kong and turn to other cities in the region or places in mainland China to do business.