Fairfax chief executive Greg Hywood (pictured above) has warned that the staff cull from its newspaper business is not yet over.
On Wednesday the publisher announced 125 editorial staff would go from its national newsrooms, prompting a seven-day strike by staff.
However, Hywood used a speech at the Macquarie Connections Conference in Sydney yesterday that signalled it would be the end of cuts to editorial staff, however, “further technology, back office and support function cost savings are still to come,” he said.
A former journalist himself, Hywood said he respected his striking journalists for their stance, but added “passion alone” wasn’t enough to transform the business so it had a sustainable future.
In an interview with The Australian, Hywood said: “After this year, we will be spending $100 million on year on journalism, that’s a lot of money.
“But what we are doing is that we are making sure that our publications are profitable and by profitable that means sustainable.
“They are profitable now and they have to continue to be profitable. You have to look into the future right and look at revenue trends,” he said.
He added that despite the concerns from staff, readers and advertisers, only 10 per cent of staff cuts over the past five years had been from newsrooms, the rest coming from back office or support staff.
The other quandary for Fairfax bosses is its weekday print editions. At present they still bring in substantial revenues, however, dwindling circulations and readers moving to online suggest they won’t for too much longer. However, if Fairfax was to close the weekday print editions it would leave significant revenue holes which could lead to even more cost cutting.
It’s other problem is its older readers still want print, while younger readers have migrated online but are adverse to paying for content.
Fusion media analyst Steve Allen said many of the decisions the company was making was to shore up the share price and had little to do with editorial quality or the company’s longterm sustainability.
Speaking to ABC.net.au, Allen said: “But if they don’t want reliable articles — you know, things that are fact-checked, things that are investigated — and they won’t pay for the newspaper, and they won’t pay for the content when it’s put online, where are we all going to get accurate journalism from? Aside from the ABC?
“We are going to get to the point where we can’t trust what we’re seeing online because it could be shoddy, it could be made up completely.
“We are in danger in Australia of losing some revered and quality [newspapers] … we’ll be left with one, and that’s The Australian, the national News Corp masthead,’ he said.