Mercury retrenches third of staff following GCIS move

Sipho James, new business development manager at Mercury, confirmed that while some "key staff members" have been retained, the GCIS team of seven people were unfortunately retrenched, as were two members of the finance department and one receptionist. Mercury CEO Tamoledi Selane claimed a staff compliment of 32 and billings of R300million in a profile published about him in the Financial Mail in August 2010.

"Not closing down"

James dismissed market speculation that Mercury might be forced to close down. "Like I stated last week in [the Mail & Guardian], we are not closing down, we are going through a structuring process. Yes some staff members have been retrenched, as is the norm in our industry, particularly when you lose an account of the size of GCIS, but the agency is still in operation," he said.

James was referring to an article published in the M&G which claimed that the GCIS has put out a tender for a 12-month-long "transfer of skills" to the department, after which it would take control of government ad spend. Its contract with Mercury expired at the end of August and wasn't renewed.

The M&G story speculates that the move to centralise government ad spend is aimed at directing more revenue towards the SABC and the yet-to-be-launched newspaper, The New Age. The latter is funded by the Gupta family, who are perceived as close to President Jacob Zuma.

According to the story published in the M&G, "The New Age's owners, the Gupta group, took legal advice on the question of government advertising even before the newspaper was set up" and that a considerable chuck of public money would be directed to the start-up. The special Heritage Day edition of the paper, which was a once-off project, was filled with government ads, and the M&G claims some Free State provincial government departments had a direct order from the province's premier to advertise in the edition.

Rejected specific claims

The GCIS has since rejected specific claims published by the M&G as to what percentages of its budget will be spent on "patriotic media" but the newspaper is standing by its story.

Mercury's other clients include Telkom and the South African Revenue Service (SARS), as well as the Independent Electoral Commission (IEC).