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July 7, 2020

Mirror publisher Reach to cut 550 jobs in response to Covid-19 revenue hit

By Dominic Ponsford and Freddy Mayhew

The UK’s largest newspaper group Reach today announced plans to cut 550 staff (or around 12% of its workforce).

The cutbacks are part of changes intended to deliver savings of £35m a year at a one-off cost of £20m.

As of 2019 Reach employed 2,598 journalists and editorial staff across 150 national and regional press brands. Its national news brands include the Mirror and Express and regionally it publishes titles including the Manchester Evening News and Birmingham Mail.

The company reported revenue for the second quarter of this year down 27.5% year on year – with print down 29.5% and digital down 14.8%. Print circulation is “significantly below” pre Covid-19 levels.

As lockdown eased in the UK in June the company reported some improvement, with digital revenue down 4.9% year on year in June compared to 22.5% down in April. Print was down 26.7% in June versus 31.8% in April.

Plans announced today will see a more centralised structure for editorial “bringing together national and regional teams across print and digital to remove duplication while maintaining the strong identity of our news brands”.

Reach claimed 41m unique visitors to its websites in May and 2.5m registered customers. It now has a target of 10m registrations by 2022.

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The company said it plans to create a new self-service digital advertising platform for smaller companies and will continue to invest in its automated local news aggregation website InYourArea (it currently has 800,000 active registered users).

All temporary pay cuts announced in response to Covid-19 will end with the exception of board members who will continue to take a 20% reduction.

Chief executive Jim Mullen (pictured) 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.

“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.

“Award-winning journalism and content will always be at the core of our purpose.  Through the transformation, Reach will realise the full potential of its business model, enabling our news brands to continue to shape the daily conversations of millions of people for years to come.”

In 2019 Reach reported revenue of £702.5m (down 3% year on year) and adjusted operating profit of £153.4m (up 5.4%). Digital revenue was £107m (up 17.2%).

In an email to staff, seen by Press Gazette, Reach group editor-in-chief Lloyd Embley and group chief operating officer Alan Edmunds said the “transformation” plans would have implications for “everyone in our editorial, circulation and printing teams – both regionally and nationally.”

They said the heart of the transformation was the creation of a “single editorial division, rather than the current nationals and regionals split” with the same for circulation teams.

Across editorial and circulation, staffing numbers are expected to fall by around 325, they said, with more roles potentially put at risk in order to “conduct a fair process”.

The pair said that demand for Reach’s print and online journalism had been resilient during lockdown, but “despite the loyalty of many of our readers, the revenue reduction has been significant”.

They added: “We have essentially been hit with three years of impact in the space of three months.”

A live stream with staff will be held at 1pm today and all departments are set to be told about how the proposals affect them specifically by Friday. Consultations will last 45 days.

“We do, of course, still want our journalists to be passionate about their newsbrands – but it is absolutely vital for our future to create a culture which allows us to harness the full potential of the Reach network,” said Embley and Edmunds.

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