Guardian Media Group chief executive Carolyn McCall has warned that the company’s regional division is in “a struggle for survival”.
McCall sent an email to staff in response to the National Union of Journalists advert in today’s Guardian which criticises cutbacks in the group’s regional divisions.
McCall said the regional group’s profit – £14.3m in 2007/2008 – would be 85 per cent down in 2008/2009.
She added the regionals had been loss-making for “several months” – with no sign of improvement.
She wrote: “The division is now – along with the rest of the local and regional press – facing a struggle for survival as the recession compounds structural problems such as classified advertising moving to the web.
“Although, as the NUJ’s letter points out, the regional division will post a small, underlying profit [before exceptional losses] for the 2008/09 financial year ending this month, this profit will have fallen by at least 85 per cent compared with 2007/08.
“The downward trajectory is clear, and it’s getting worse. The division has, in fact, now been making an operating loss for several months.
“If the management team of GMG Regional Media takes no action to reduce costs, these losses will soon become completely unsustainable, which could lead to the end of the business and its newspapers altogether.
“The structural changes at play mean revenues will not return to old levels even when the economy recovers.”
McCall said the changes would help the regionals break even – and added cost-cutting was also taking place at Guardian News and Media, the national division.
She concluded: “In the meantime, GMG Regional Media has no option other than to take the steps necessary to stay in business.
“GMG Regional Media management is continuing to talk to the unions in the most constructive way possible in order to bring in these changes, and work towards a sustainable future for our local and regional papers.”
GMG this month annouced 78 editorial jobs are to go in Greater Manchester, and 35 journalists are to go in Surrey and Berkshire.