Al Jazeera announces further cutbacks as it adjusts ‘business model’
London - Qatar’s international news broadcaster Al Jazeera announced it would eliminate 500 jobs in its latest cutbacks, as the tiny Gulf state and its Arab neighbours continue to fiscally adjust to dwindling oil and gas revenues.
The cuts came via memo from Al Jazeera Director-General Mostefa Souag, who described the lay-offs as a “workforce optimisation initiative” designed to be in line with modern media changes and challenges.
Souag’s memo stated the network must “consider and respond to the large-scale changes under way in the media landscape”. Leading media organisations across the world are being forced to redefine their business models and “Al Jazeera is no exception”, he said.
It was the second set of cutbacks by the news outlet in less than three months. In January, the US offshoot of Al Jazeera announced it would be ending its operations as of April 30th, cutting 700 jobs in the process. Factoring in both sets of cutbacks means the network is shedding 20% of its global workforce, bringing the overall number to 4,000.
Al Jazeera America failed to resonate with viewers, attracting an average prime-time audience of 34,000 in 2015, a dismal figure when compared to cable news channel leader Fox News, which averaged 1.72 million prime-time viewers during the same period.
The channel’s representatives blamed the operation’s closure on the US economy, stressing that “the Al Jazeera America business model is simply not sustainable in light of the economic challenges in the US media marketplace”.
Al Jazeera, founded in 1996, is one of the few modern success stories to come out of the Gulf in terms of global recognition. During a period when profits and cost-cutting measures were not an issue, the Doha-based channel became a global brand name, to the degree that it ranked as the world’s fifth most influential brand in 2005, behind such heavyweights as Apple, Google and Starbucks, in a survey of readers of Interbrand’s Brandchannel.com.
The channel’s editorial policy upset a number of Middle East countries, including Saudi Arabia and Egypt, and the latter accused it of being too favourable to the Muslim Brotherhood.
This led to an international incident in which Egyptian authorities arrested several Al Jazeera correspondents on terrorism charges during the 2013 revolution.
Qatar’s economic challenges continue to accumulate, with Doha forecasting a budget deficit of more than $12 billion in 2016, its first in 15 years. Also a drain on resources is its hosting duties for the 2022 FIFA World Cup.
The cost of completing projects related to the event is proving to be a challenge, particularly since construction costs in Qatar are the highest in the Gulf Cooperation Council (GCC) region, according to experts. Deloitte estimates it will cost Doha $200 billion to host the World Cup, a much bigger investment than South Africa’s $4 billion in 2010 and Brazil’s $15 billion in 2014. Russia has budgeted $11.8 billion for the 2018 World Cup.
The Doha government has asked banks to provide a $5.5 billion loan to help reduce domestic borrowing as the government continues to finance preparations for the World Cup.
According to Al Jazeera, the latest cuts mostly affect the channel’s Doha operation, with 300 positions being lost there. The remainder would be in its global operation. The latest cuts apparently spared the employees of its English-language channel, Al Jazeera International.
In terms of a long-term solution, Doha is on par with the rest of the GCC with regards to the need to diversify its economy beyond petrodollars, something the International Monetary Fund (IMF) said Qatar is well on its way to achieving.
IMF Managing Director Christine Lagarde said during a visit to Doha in November that “as far as Qatar, there have been solid and strong policy measures to diversify the economy”, describing current economic circumstances as a “wake-up call”.