18 Jun 2012

Fairfax to slash Australia newspaper jobs

7:22 pm on 18 June 2012

Trans-Tasman media company Fairfax is to cut 1900 jobs over the next three years, as it moves to become a digital media company.

About 16% of Fairfax staff will be cut over the next three years as the company restructures its major newspapers.

But no New Zealand employees will be affected by the cuts, and executives say that online subscriptions for its New Zealand news website Stuff won't be put in place any time soon.

In Australia, the firm will also close two printing facilities, re-size printed versions of the Sydney Morning Herald and The Age and introduce digital subscriptions, AAP reports.

Job cuts include about 150 editorial positions expected to be lost from The Sydney Morning Herald, The Age and The Canberra Times.

The measures will have a one-off cost of about $A248 million, and result in annual savings of $A235 million from June 2014.

Fairfax chief executive Greg Hywood says readers' behaviours have changed and will not change back.

As a result, we are taking decisive actions to fundamentally change the way we do business.

Fairfax will introduce subscriptions for its Sydney Morning Herald and The Age websites in early 2013, though free access will be available for some parts of those sites.

The printed versions of those two mastheads are also to be made more compact, similar to the size of its Australian Financial Review newspaper, from 4 March, 2013.

Fairfax will close printing facilities at Chullora in Sydney and Tullamarine in Melbourne by June 2014.

The company also announced on Monday that it was selling off $A160 million of shares in New Zealand online auction site Trade Me, reducing its stake from 66% to 51%.

Michael Gawenda who is a former editor of The Age newspaper and currently director of the Centre for Advanced Journalism at Melbourne University says there's no evidence that paywalls for digital news services have been successful.

NZ print runs stable, for now

New Zealand employees will not be affected by the radical staff cuts across the Tasman.

In New Zealand, Fairfax Media has two national, nine daily and more than 60 community newspapers as well as some 25 magazines and website stuff.co.nz, the company's website says.

Mr Hywood says a reduction to New Zealand's printing run won't be introduced anytime soon.

A similar strategy wouldn't work here because the competitive market is too small, he says.

New Zealand's Fairfax chief executive Allen Williams says Monday's announcement related to Australia's operations and there are no planned job losses nor any plans to charge for online content in New Zealand.

Changes well received by shareholders

Changes announced on Monday were well received by Australia's share market but Fairfax journalists there reacted with astonishment and unions in the industry demanded talks with management, the ABC reports.

Opposition communications spokesman Malcolm Turnbull told the ABC that the problem the newspaper business faces is not a lack of readers, but that revenue lost from printed newspapers is only partly being replaced by digital revenue.

It is a revenue problem, not a readership problem, he says.

Garry Linnell, group editorial director of Fairfax's Metro Media division, says the industry has seen increasing fragmentation over the past three or four years.

Meanwhile, Fairfax Media says Gina Rinehart has raised her stake in Fairfax to 18.67%, following two share raids last week. That takes her holding in the media company to just below the 19.9% at which a full scale takeover can be launched. The mining billionaire is now the largest-single shareholder of Fairfax, the ABC reports.