Tuesday 4th of September is a day that will live in the memory of those at The Guardian in Manchester. The conference room at the company’s plush new offices was booked for a staff meeting with managing director Tim Brooks and new commercial director Adam Freeman.
Nobody suspected the bombshell that was to be dropped.
For the slick presentation revealed that around 48 of the 60 sales posts in Manchester were to be made redundant.
Effectively the telesales department was to be moved to London.
Said one insider, “People were shocked, some were crying. We had expected some cut backs but nothing on this scale.
“We accept that these things happen in this industry – but not at The Guardian, which is owned by a trust.”
This is not seen as just another set of redundancies. In many ways, the restructure is historic. It means what was once a Manchester institution has relegated its offices in the city to, very much, a satellite operation.
The newspaper was founded in the city as The Manchester Guardian in 1821 – but was moved into the London market in the 60s.
Although some editorial, finance and a few other functions will remain, this is seen as a major retreat by the business and very much as the end of an era.
It is also at odds with developments elsewhere. The BBC is moving to Manchester while Crains, the leading American publisher, is planning to launch a new newspaper in the city.
Said one employment specialist: “It is common for companies to centralise departments, but most are centralising out of London – which is far more cost effective.”
The argument seems particularly compelling as the newspaper group recently moved into new offices in the city and has ample space – one whole floor remains vacant. So why wasn’t the telesales team centralised into Manchester?
“This has nothing to do with cost cutting,” said a spokesman, “We are particularly keen to ensure this business has a shape and format which allows us to move forward in a very competitive environment. Bringing the sales team under one roof in London provides a much more direct link with management.”
However, the analysis of rival publishers is different. “It will be remarkable if they persuade people that this is nothing to do with cost,” said one, “Guardian recruitment has halved in the last five years.
“They had to do something, but it seems high risk to move an operation which might be responsible for around one third of its revenue.”
Some estimate that the Manchester office brings in between £25-£30m per year. However, The Guardian takes issue with talk that revenue is in freefall, “Saying the newspaper recruitment is down, does not take into account the rise in our online side which is very profitable.”
Nevertheless, other publishing houses are already circling, hoping to pick up staff – and the local knowledge and customer relationships that go with them. It is estimated The Guardian team had 700 years of experience between them.
Said another publisher, “We are already interviewing people from The Guardian. They tend to be very well trained and good at what they do. I suspect The Guardian team will not have a problem finding other jobs in Manchester. Who this will really hit are any other media sales people who were looking for a job before The Guardian announcement was made.”
No doubt, prime targets for those rivals are The Guardian senior management team of Ann Waterson, Tony Bowley and Paul Islam whose jobs were also made redundant. However the Guardian spokesman said the company was hopeful that at least one will remain with the company in another capacity.
“We are in consultation with all staff,” said the spokesman, “some are being offered relocation packages in London, where another 18 jobs are being created.”
Meanwhile the newspaper says it will bolster its Manchester field sales team by three. But even they might find it difficult in the short-term, because with the various processes and consultations that need to take place, it is likely to be November before the future of all their former colleagues is decided.
It would all seem an anathema to the newspapers famous editor and proprietor CP Scott, who instilled the liberal values for which the newspaper became renowned. It was his son JR Scott who founded the Scott Trust, the organisation which owns the newspaper.
Its main objective is to maintain the financial viability of The Guardian and “…to devote the whole of the surplus profits of the Company which would otherwise have been available for dividends … towards building up the reserves of the Company and increasing the circulation of an expanding and improving newspaper.”
In reality the structure meant that the profitable Manchester Evening News always funded the loss making Guardian.
However, in recent years with the growth of online and the collapse of paid-for circulations the MEN has not been the cash cow it once was. In July, for example, it too made 35 people redundant.
Are you looking to get rid of 20 or more employees at one establishment within 90 days (including voluntary redundancies)? If so, you will have to follow the same procedures as The Guardian, says Cobbetts Solicitors
ï Do consult in good time with employee representatives – at least 90 days in advance where 100 or more employees at risk, or 30 days where 20 to 99 employees at risk.
ï Don’t serve notice until after the 30/90 day consultation period is completed.
ï Do consult fairly and meaningfully.
ï Do consult about ways of avoiding the dismissals; reducing the number of dismissals; and mitigating the consequences of the dismissals.
ï Do write to the employee representatives setting out the required details of the redundancy exercise.
ï Don’t forget to notify the Secretary of State (HR1 form).
ï Don’t forget consultation with employees individually.
ï Don’t discriminate when selecting for redundancy. Ensure selection criteria is applied consistently and fairly.