Some marketing communication agencies have placed a number of their staff on compulsory leave without pay. Others who are in salary areas are contemplating similar actions or slashing salaries as implications of Covid-19 upend the sector.
“We have placed a number of our staff on compulsory leave without pay as clients’ jobs have diminished”, following the pandemic which is ravaging economies, a CEO of a media agency based in Lagos told BusinessDay recently.
Marketing communication agencies are not alone in this quagmire as other major sectors are hard hit by the Covid-19 effects. They are aviation, vehicle transport business, hospitality, travel and tours, event centers and the downstream oil sector.
Many airlines, both local and international have grounded their fleet while commercial vehicles both inter and intra city busses have stopped operation on account of rules and lockdown targeted at checking the spread of Covid-19.
The Nigerian hospitality sector, which is still recovering from the traditional lull in business between January and early February of every year, is facing even more difficult challenge occasioned by the coronavirus (Covid-19) pandemic.
From occupancy rate of between 50-60 percent in late January, hotels are now recording below 25 percent, the worst in the history of the sector due to lockdown over coronavirus.
The pandemic is also affecting the downstream sector, according to sources. The operators are battling with fundamentals such as low margins, source of forex, rate of forex and transportation logistics. Education sector is also affected.
What all this means for marketing communication industry is that media agencies, both creative, PR and outdoor, among others that have clients in these sectors as primary source of business sustenance are also in for hard time. This is in addition to heavy burden placed on them by the difficult operating environment occasioned by slow economic growth at 2.27%, marketing communication budget cut, multiple taxation, delayed payment by clients and competition.
A recent survey by Kantar revealed that Nigerians are increasingly concerned about the coronavirus situation and its implications on the economy. With 5,200 cases and 170 deaths and several weeks of lockdown, the socio-economic effects are hard-hitting.
This unease is evident in latest Kantar report which indicates that about 150 million Nigerians out of about 200 million population are afraid of national financial breakdown followed by economic recession and hardship occasioned by Covid-19.