The Financial Times is planning a net reduction of 25 editorial jobs as it moves ahead with plans to “accelerate the shift from print to digital”.
Parent company Pearson yesterday warned that restructuring costs would hit FT Group’s profits for 2012.
And yesterday editor Lionel Barber outlined in an email to staff exactly what that will mean.
He said a voluntary redundancy scheme has been opened and: “The intention is to reduce the cost of producing the newspaper and give us the flexibility to invest more online.”
He added: “Our common cause is to secure the FT's future in an increasingly competitive market, where old titles are being routinely disrupted by new entrants such as Google and LinkedIn and Twitter. The FT's brand of accurate, authoritative journalism can thrive, but only if it adapts to the demands of our readers in digital and in print, still a vital source of advertising revenues.”
Barber said there will be less variation across the FT’s various global print editions as it seeks to cut 35 editorial staff and recruit ten new digital journalists.
The plan is, he said, to cut £1.6m from the editorial budget.
Barber said: ”This is not an easy transition, but we are obliged to take the difficult steps to secure the FT's future as one of the world's great news organisations.”
In 2011 FT Group achieved adjusted operating profit of £76m on sales of £427m.
It boasted a combined paid print and digital circulation of 600,000, which the company said was the biggest in its history. The average daily audience across print and online was said to be 2.2m.
But while the online audience has been growing, sales of the print edition have plunged in recent years.
In December the FT, which sells for £2.50 on weekdays in the UK, reported a total global circulation of 286,000 – down 14 per cent year on year.
Paid-for circulation in the UK and Ireland was around 50,000 during the week, rising to around 85,000 on Saturdays.
The FT group also includes specialist financial information provider Mergermarket and a 50 per cent stake in The Economist.
In December 2011 the FT Group sold its 50 per cent stake in FTSE International to the London Stock Exchange for net proceeds of £428m.
FT editor Lionel Barber’s memo to staff in full:
My visit to Silicon Valley last September confirmed the speed of change. Our competitors are harnessing technology to revolutionise the news business through aggregation, personalisation and social media. Mobile alone, for example, now accounts for 25 per cent of all the FT's digital traffic. It would be reckless for us to stand still.
Of course, we must stick to the tested practices of good journalism: deep and original reporting based on multiple sources and a sharp eye for the scoop. But we must also recognise that the internet offers new avenues and platforms for the richer delivery and sharing of information. We are moving from a news business to a networked business.
In order to engage more deeply with our readers, we need to introduce a more intelligent, balanced and efficient deployment of our investment and our people. So we are proposing a shift of some resources from night work to day and from print to digital. This requires an FT-wide initiative to train our journalists to operate to the best of their abilities. And it requires decisive leadership.
I am determined that we do everything we can to secure the FT's future as a world class, financially sustainable news organisation. Our earlier decisions to raise prices, charge for content, and build a subscription business have proven to be bold and wise. While many of our rivals have struggled to find a profitable business model, and have therefore announced heavy job losses, we have been industry pioneers. This is not the moment to falter.
Of course, change is wrenching. I therefore want to assure you that serious consideration and consultation have gone, and will go into the proposals that follow. So too our desire to be fair, honest and transparent. We are now entering into a consultation with the National Union of Journalists and staff to consider the FT's future and these proposals so that we take the right path forward, in a fair and open dialogue.
Let me make several points clear at the outset. I want to sharpen our commissioning to produce more selective, relevant, high quality content. I would like to implement measures to simplify the newspaper to lighten the work load and reduce the resources devoted to print. These include:
1. Common ad shapes across editions – reducing unnecessary tweaks and edits between editions.
2. A more common international edition with common fronts and second fronts.
3. A possible move to a common running order between UK and international editions with World at the front of the run
4. Restrictions on the number of changes requested for US second edition.
5. A paring back of the UK 3rd edition.
6. A far more disciplined adherence to copy delivery times, and improved forward planning
7. An end to "octopus commissioning" — we need fewer commissioning channels. Equally, news editors must clearly identify priority stories.
8. Tighter control of pagination We need to ensure that we are serving a digital platform first, and a newspaper second. This is a big cultural shift for the FT that is only likely to be achieved with further structural change.
We must find a way to reduce production resources at night and increase them in the day; these same resources must also be increasingly devoted to the web and less to the newspaper.
On unified news desks, we need to become content editors rather than page editors. We must rethink how we publish our content, when and in what form, whether conventional news, blogs, video or social media.
In our UK and international reporting network, we must seek to have people in the right places ready to devote their talents to covering the big FT stories and not risk becoming isolated in silos or geographies.
Pearson, the FT's parent company, is firmly behind our strategy and our proposed transformation and is providing financial support for the reorganisation we are planning for the first quarter of this year.
The proposed voluntary redundancy programme will help us to reshape structures and reduce our costs by £1.6m in the current year. We estimate this could translate into a net headcount reduction of about 25 people after the introduction of 10 more digital jobs, some of which we are advertising already.
We encourage people wanting to leave the paper to step forward. We will also be consulting with the NUJ as to what further steps we might have to propose if we do not achieve the right level of take-up for the planned VR scheme.
Finally, we will be launching new products and services online in 2013, starting with our "Fast FT" markets and a new Weekend FT app.
This will be an opportunity for all of us to think harder about a more dynamic and interactive form of FT journalism beyond the printed word. This is vital to drive deeper engagement with readers and build our subscriptions business.
I will be taking part in meetings with team leaders to explain these changes, to listen to your ideas, and answer any questions. In the meantime, James Lamont, the managing editor, will supply details of the voluntary redundancy programme and consult widely with you.
Assistant Editors and team leaders will be briefed on the outline of the proposals. They will do their best to answer your questions and offer you their support. Throughout the FT's history, we have made great progress in a changing industry. You have taken impressive strides to modernise the FT and I am deeply appreciative of your willingness to adapt to change. This is not an easy transition, but we are obliged to take the difficult steps to secure the FT's future as one of the world's great news organisations.
And with your support in this 125th anniversary year, we can do that and continue to do what we do best: the business of quality journalism
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