Star TV restructure: up to 200 layoffs expected

Reports suggest that the company will make the redundancies in the next 12 months.

Jannie Poon, senior vice-president, corporate affairs and communications at Star, said: “Star Hong Kong has a headcount of 560-plus staff. With the restructure, it is estimated that about 30 per cent of the Hong Kong headcount (150-200 people) will be reduced over the course of this financial year, which ends June 30, 2010, through savings from efficiency and moving of resources from Hong Kong to local markets. It has been tough.”

Paul Aiello, the CEO of Star is expected to leave the company by December. 

Experts say that Star’s restructure emphasises the growing importance of domestic markets such as India and China. This structure has been favoured by multinationals including PepsiCo and Coca-Cola, which have dropped regional hubs to focus on local markets.

An ex-Star employee who did not want to be named said: “India contributes about 75 per cent to Star’s revenue globally and the company there has a strong local management team in place. Why would they need to double-manage the country through a regional team? With the kind of revenues these local markets are generating the parent entities have realised the importance of controlling them directly.”

Industry sources also feel that the Star’s new structure could mean greater responsibilities for the management teams of India and Greater China, as they will be responsible for their own profit-and-loss and will not be buffered by regional operations.

“Basically Star has set India and China free. They will have direct access to the top management at News Corp and all their initiatives will be treated on merit. They can sound out their views more directly.”

Another industry insider in India said this structure makes sense for Star because of the potential for growth in India.

“There is a huge untapped market for Star in India which it has just begun to explore. It has recently begun a foray into the large regional language space, which is huge."

As part of its announced restructuring, Star’s English-language channels will be managed by Fox International Channels and the company’s Asian broadcasts will be restructured into three units - Star India, Star Greater China and Fox International Channels. John Lau, Star's president of China and Taiwan, and Uday Shankar, chief executive of Star India, will both report to James Murdoch.