The Evening Standard is putting a number of staff on furlough, cutting the salaries of those that keep working, and suspending publication of its weekly ES Magazine supplement.
The measures are the latest to be taken by the free daily newspaper, owned by Russian billionaire Evgeny Lebedev, under the “very challenging circumstances” brought about by the coronavirus (Covid-19) crisis.
The Standard is already delivering to homes for the first time in response to a sharp fall in the number of commuters, who would normally pick up a copy at stations in London, as people follow official advice to stay at home.
In an email to staff today, Standard chief executive Mike Soutar said advertising revenues had “slowed dramatically” during the pandemic, forcing him to take further action to protect the business.
Print advertising makes up more than 80 per cent of the paper’s income.
Soutar said that despite support from a “small core of important advertisers, we, like many other media groups across the world with a large stake in print media, do not anticipate a meaningful recovery in our ad revenue pipeline over the next two months”.
Advertising has crashed as events are cancelled and businesses face new financial difficulties caused by the outbreak.
Adding salt to the wound is the fact that some agencies are blocking their clients’ ads from appearing next to content containing the word “coronavirus”, despite booming online news traffic.
Soutar said the “sudden and unexpected reduction in revenues” has had an “immediate and very serious impact on the cash flow of the business”.
The Standard has already frozen recruitment and other expenses. Under the new measures, which are expected to last until the end of May, a proportion of full-time staff are being placed on furlough.
All those who remain will face a 20 per cent cut in their salaries, but only if they earn more than £37,500 a year. Staff who return from furlough before 31 May will also face this pay cut.
And ES Magazine will be suspended for the next two months as a result of the drop in advertising revenue seen across the weekly market.
Said Soutar: “We believe these difficult measures will help the Evening Standard weather the current storm and we hope to be able to bring employees back off furlough leave as soon as the advertising market begins to recover, though we regret the impact these measures will have on so many colleagues in the short term…
“We will continue to work with our advertising customers to encourage them to start investing again as soon as possible. And we will continue to plan for the future.”
He added: “We will work hard to get through this unprecedented crisis and emerge on the other side, stronger and more resilient than before.”
Picture: Reuters/Hannah McKay