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November 8, 2023

Reach restructure: 450 jobs to go, websites to close, print and online teams to combine

Chief executive Jim Mullen blamed the restructure on the 'economic environment'.

By Dominic Ponsford and Bron Maher

The UK’s largest commercial news publisher Reach has announced massive further redundancies, with 450 jobs going.

The restructure will see the publisher merge print and digital teams on its national and regional titles in a drive toward “future audience-led publishing”. Some of the newer regional “Live” websites are to be closed.

The restructure comes after widespread cutbacks earlier this year and the closure of some vacant posts.

Reach employed some 4,305 people at the end of 2022, of whom 2,862 were journalists.

What has Reach said about the new redundancies and why are they happening?

Reach chief executive Jim Mullen told staff in a note on Wednesday morning that the company was changing “the way we operate, the way we’re structured and the way we’re meeting the challenges facing our industry”, and added that “there’s no hiding from the fact” this would involve making an estimated 450 roles redundant. The company expects some 320 of the redundancies to be in editorial teams.

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“These plans are about reducing costs against the backdrop of continuing pressures on the business from the economic environment we’re operating in,” Mullen said.

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The UK economy has been broadly flat over the last year but online advertising spend is forecast to grow in 2023 – however, publisher ad revenue has fallen this year both in print and online.

Reach is the largest commercial news publisher in the UK with a monthly audience of 34.9m as of September 2023, according to Ipsos iris. This audience figure was down 6.5% year on year.

However, the Reach network of print titles is in structural decline as readers stop buying newspapers. The company has more than 130 print and online brands, including many of the most popular local media brands in the UK. Its national news brands include the Daily Mirror and Herald titles, the Sunday People, the Daily Express and the Daily Star.

In its half-year results published in July, Reach reported operating profit between 1 January and 30 June 2023 of £36.1m, a 23.5% decrease on the first half of 2022.

Total revenue in the first half of 2023 was £279m, a 6% year-on-year decrease. Print newspaper circulation and advertising accounted for £217m, or 78%, of total revenue, whereas digital income sources contributed £61m, or 22%.

But despite the long-term decline of print, print revenues suffered only a 3% year-on-year decline in the half, compared against a 16% drop for digital revenues.

What will the Reach restructure look like?

In a note published to the Reach corporate website the business said that, in addition to the 5-6% reduction in operating costs it is on track to deliver in 2023, it will now pursue a further 5-6% reduction in operating costs in 2024, to "mitigate against the backdrop of continuing inflationary pressures that we expect to impact 2024".

Reach's chief digital publisher David Higgerson told editorial staff in an email separate from Mullen's that the changes "mean significant change right across editorial, impacting every newsroom and team".

He declined to share specifics on structural change, saying he will discuss the plans in greater depth at editorial town halls on Thursday 16th and Friday 17th of November.

But he did explain some of the changes in broad terms, saying they will "mean stopping doing some things... that have been important in the past but that no longer serve our audience or future goals".

The company will bring "all digital and print content teams together" at both regional and national teams, Higgerson said, and each newsroom will become "future audience-led - putting digital audiences of the future at the heart of our operation".

Part of this, he said, will involve growing the number of loyal online readers who regularly return to Reach's own platforms while still trying to grow overall audience sizes.

A Reach spokesperson confirmed to Press Gazette that the restructure will involve the closure of smaller or newer regional "Live" sites, but did not say which ones.

'I do not underestimate the impact that this news will have'

Mullen said in his note: "I do not underestimate the impact that this news will have on all of our employees and I want to assure you that we will work through these changes with fairness and integrity.

"We will work closely with union and employee representatives in a thorough consultation process to keep compulsory redundancies to a minimum and end uncertainty for our people as soon as possible."

Mullen is set to host a livestream for all Reach employees at 4:30pm on Wednesday. Scroll down to read his message to staff in full.

The market had a mixed reaction to the cuts announcement, with Reach's share price jumping 4% on open before settling at around £78.30, a 0.5% increase on Tuesday's close.

Reach has made two major rounds of job cuts already in 2023. In January it announced plans to make 200 redundancies prompted by decreasing consumer spend and rising costs. This was followed in March by plans for "significant changes" to editorial operations which involved cutting 192 editorial jobs, with some 420 journalists put at risk.

An additional 13 staff were put at risk of redundancy in September with five roles set to be cut. Among those put at risk of redundancy was Richard Palmer, the father of the Daily Express NUJ chapel who has been the newspaper's royal correspondent since December 2003.

Responding to the cuts NUJ national organiser Laura Davison said that Reach journalists "have adapted at pace to company demands" and "will be understandably shocked at the scale of redundancies, particularly with previous rounds already withstood in recent months and in the run up to Christmas.

"Reach’s efforts to address economic challenges must not come at the expense of journalists who fear for their job security and the impact of quality journalism only able to thrive with the experience and talent of staff."

The UK online publishing market is dominated both in terms of audience and revenue by four US tech brands: Alphabet, Meta, Amazon and Microsoft.

Meta and Alphabet are believed to take around £15bn a year in UK advertising revenue versus around £2bn in advertising revenue for all national, regional and magazine titles combined. The gap between revenue share for publishers and platforms has tended to widen each year.

Reach redundancies: CEO Jim Mullen's message to staff in full

"Good morning everyone.

"Today we’re announcing plans to make changes to the way we operate, the way we’re structured and the way we’re meeting the challenges facing our industry.

"There’s no hiding from the fact that as part of these changes, we’re proposing to make an estimated 450 roles across the business redundant and withdraw some vacancies.

"I understand that change, particularly at this scale and after a year that has already brought many challenges for our business and our people, will be unsettling. Your local leader will speak to you directly as soon as possible to explain the plans in more detail and what they mean for you.

"I want to be very clear that these plans are about reducing costs against the backdrop of continuing pressures on the business from the economic environment we’re operating in.

"Just as importantly though, they’re about recognising that even with the digital strength and scale we’ve built over the years, we’re in a fight to get our journalism in front of as many people as possible. The changes will help sustain our print products while enabling us to pursue a greater digital audience.

"The world of news production and consumption continues to change. As customers’ habits evolve rapidly, so must we, to make sure our brands and our content remain influential and impactful.

"What will not change is our commitment to quality journalism. The challenge now is to ensure that it continues to get seen, gets noticed, engages and makes a difference.

"Hard work over the last few years means we have established ourselves as a leading digital publisher. We understand much more about our audience, allowing us to drive better customer value. We’ve developed our online products and grown new audiences, including through our successful expansion into the US.

"But there’s more to do and today is about organising our business and our cost base to deliver against that challenge.

"Our industry has a history of change and the future will undoubtedly involve yet more. That’s why it’s essential we set ourselves up to win, by making our operations suited to an increasingly fast-paced, competitive and customer-focused digital world.

"I do not underestimate the impact that this news will have on all of our employees and I want to assure you that we will work through these changes with fairness and integrity. We will work closely with union and employee representatives in a thorough consultation process to keep compulsory redundancies to a minimum and end uncertainty for our people as soon as possible.

"We want to redeploy people where possible and support our colleagues to have rewarding careers working with us as the business moves forward and we deliver on our plans.

"I ask that as we go through this process we show respect for those affected and get behind the changes needed to align our business to the fast-changing landscape we operate in.

"I will stay in touch as we work through the changes we need to make. I hope that you’re able to join me as I talk through them in a bit more detail in a livestream later today. After that I will share a form so that you can ask me questions directly."

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Select and enter your email address Weekly insight into the big strategic issues affecting the future of the news industry. Essential reading for media leaders every Thursday. Your morning brew of news about the world of news from Press Gazette and elsewhere in the media. Sent at around 10am UK time. Our weekly does of strategic insight about the future of news media aimed at US readers. A fortnightly update from the front-line of news and advertising. Aimed at marketers and those involved in the advertising industry.
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  • Manager
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  • Retired
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