Daily Record group axes 550 staff as income slumps
Newspaper sales have fallen sharply
UPDATE 8 July: Daily Record owner Reach is to cut 550 staff, or 12% of its workforce, following a sharp plunge in income.
The group’s titles, which include the Sunday Mail, Daily Mirror, Daily Express and Daily Star, will be more closely integrated with some offices closing.
Across editorial and circulation, staffing numbers are expected to fall by around 325.
The chief operating officer Neil Jagger is the highest profile casualty so far.
Editorial will move to a more centralised structure bringing together national and regional teams across print and digital “to significantly increase efficiency and remove duplication while maintaining the strong editorial identity of our news brands”.
In local commercial as well as in finance, Reach will move to fewer locations and a simpler management structure, with costs geared to current market conditions.
All departments are set to be told about how the proposals affect them specifically by Friday. Consultations will last 45 days.
It is the second newspaper group to announce job cuts this week following Herald owner Newsquest’s statement.
Reach, formerly known as Trinity Mirror, said it has already passed its full year 2020 target in achieving over 2.5 million customer registrations. It is now increasing its 2022 target to 10 million by 2022 up from the 7 million announced in February.
“Through stronger and deeper personalised customer relationships the business will make its content more relevant and advertising more targeted, increasing the value of its audience,” it said in an update.
It said the accelerated strategy and new structure will enable Reach to end the previously announced temporary pay cuts for all colleagues except for the CEO, CFO and other board members, whose pay will continue to be subject to a 20% reduction.
All annual bonus schemes relating to 2020 remain suspended. The company will also resume its monthly contributions towards historic pension deficits following the deferral announced in April.
Jim Mullen, chief executive, said: “Structural change in the media sector has accelerated during the pandemic and this has resulted in increased adoption of our digital products. However, due to reduced advertising demand, we have not seen commensurate increases in digital revenue.
We have completed plans to transform the business and are ready to begin the process of implementation– Jim Mullen, Reach
“To meet these challenges and to accelerate our customer value strategy, we have completed plans to transform the business and are ready to begin the process of implementation.
“Regrettably, these plans involve a reduction in our workforce and we will ensure all impacted colleagues are treated with fairness and respect throughout the forthcoming consultation process.
“The plans will provide a stable platform for us to accelerate our strategy, based on stronger and deeper customer relationships, increasing our appeal to advertisers. This will ensure the sustainability and profitability of the Reach business, enabling it to deliver to stakeholders over the long-term.”
Second quarter group revenue to the end of June fell 27.5% compared with the corresponding period last year.
Print revenue declined by almost a third (29.5%) and digital revenue was unable to make up the difference, also down by by 14.8%.
Circulation remains “significantly below” pre-COVID-19 levels with local advertising continuing to be “challenging”.
Year to date Group revenue to 28 June was down 17.5%, benefitting from the good start to the year before COVID-19 began impacting the business in mid-March.
In June, the group has seen modest but encouraging improvements in circulation and national digital revenue as the Government’s lockdown restrictions have eased.
Group revenue declined by 23.9% in June compared with 30.5% in April. In June digital saw a decline of 4.9%, compared to the 22.5% fall seen in April when the impact of COVID-19 was at its worst. Print revenue in June was down 26.7% year on year compared with the 31.8% decline seen in April.