The Guardian announces cost saving strategy amidst talk of job cuts
The Guardian has announced that it will cut running costs by 20 per cent as it attempts to make up for increasing losses which are expected to reach around £50m by the end of the tax year.
The Guardian
The cost saving strategies, which could reportedly see 100 jobs cut, are a response to the faster than expected downturn in print advertising and slower increase in digital revenues.
Coupled with the costs of expansion overseas, the company says its outgoings have outpaced its revenues over the past five years but the new plans should help it break even within three years.
Editor-in-chief Katharine Viner and chief executive David Pemsel outlined the new strategy to staff which focused on future growth and rapidly changing market conditions.
Pemsel said: “Growing the cost base more than revenue is simply not sustainable.
“We need to create a confident and secure footing to then be able to be as innovative and progressive as we’ve always been. I don’t want to just pile on the ‘let’s be innovative and bravely go into this new world’ when the foundation is that fragile.”
Guardian News & Media has admitted that might of Google and Facebook in the digital market, combined with the growth of mobile, has made it difficult to generate any revenue with print and accelerated the pace of change since last summer.
Print advertising fell sharply in the year by an estimated 25%, and although the Guardian beat this market average, the decline was not offset by digital revenues.
The cost of expanding into the US and Australia has also increased costs. Over the past three years, the Guardian has appointed 479 across its commercial and editorial departments with a third of those taking place in the US and Australia.
Pemsel declined to confirm rumours of job cuts until plans is finalised.