MEDIA giant MediaCorp has started a cost-cutting drive, which will see the broadcaster shutting down operations and scaling back staff benefits.

Citing the economic slowdown which has affected the company's bottom line, the measures were announced to staff in an internal email from MediaCorp chief executive Lucas Chow on Friday afternoon.

The four cost-cutting measures, which were confirmed by a MediaCorp spokesperson, include seven enforced common leave days where operations will be shut down, to reduce wages and utility costs.

It will affect all employees except for those performing 24/7 services in news or radio. The common leave days will begin from Jan 28 to Jan 30 after Chinese New Year, said Mr Chow.

From April, the broadcasting giant, which also runs ChannelNewsAsia and free newspaper Today, will also implement a four-day work week every other week affecting all employees as well. This makes a total of 26 six common days off, for which staff will not be paid.

Both schemes will also be combined that may result in week-long closures of the company, Mr Chow. MediaCorp will use this period to service equipment. The company is also considering letting staff go for training and skills upgrading during this time.

Staff are also encouraged to clear all their annual leave, which will no longer be allowed to be carried forward to the next year. A new benefit scheme, introduced last year, giving $100 to employees to spend, has also been suspended indefinitely.

In his message, Mr Chow said that MediaCorp's current fiscal year ending March, while 'largely on track in the first half, will be hit by the weakening economy.'

The company reported revenue of $530 million for the year ended Mar 31 2008, with profits of $52 million.

'Mediacorp relies heavily on advertising revenue, which is extremely sensitive to the overall economic climate. As a result, our financial performance in the third quarter of our fiscal year has been affected and prospects look weak in the months ahead,' he said.

He added that the company has already cut non-wage related costs and capped overseas travel, utilities, administration and other expenses, while variable bonuses have also been cut in line with the weaker company results, which has affected senior staff significantly.

Mr Chow explained the reason for the cost-cutting measures: 'Going into the new fiscal year, we have to go even further in order to keep the company afloat. Manpower salaries form a big part of our operating expense, and we have no choice but to manage this cost element.'

He said he remains committed to saving jobs, and had consulted with union leaders, management and the chairman.

'These are unusual times calling for unusual measures. When times improve, we will persevere in our efforts to improve staff welfare and benefits,' he assured staff.