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Fairfax slashes: ‘quality journalism’ with hundreds of fewer staff

The Age and The Sydney Morning Herald are preparing for a wave of industrial action after new Fairfax CEO Greg Hywood wielded the axe this morning, sacking over 100 production staff to achieve annual cost savings of $15 million under the cover of an announcement spruiking “quality journalism”.

Newsrooms in Melbourne and Sydney were rocked when the horror news came through from Hywood shortly after 10am that sub-editors from Fairfax’s metropolitan titles would be hived off and replaced by Pagemasters contractors across three capital cities.

Fairfax currently outsources much of its sections content to the AAP subsidiary, but news, sport and business has remained in-house to prevent egregious errors and maintain the company’s teetering credibility with readers. Hywood said the redundancies will end up costing $25 million over the next eight weeks.

As Crikey went to print, irate Sydney Morning Herald staff were in a tense meeting with Hywood, metro chief Jack Matthews, SMH publisher Peter Fray and editor Amanda Wilson, who it’s understood was in tears. A planned net annual saving of $3 million from the Herald editorial budget was flagged, which some suggest was a questionable outcome from an operation turning a net profit of $2.2 million a week.

At The Age, reporters preparing for today’s Victorian state budget lockup were pondering whether they would bother filing any copy at all for the paper, leaving Hywood and Matthews to write and sub the paper themselves. A stop work meeting is planned for 4pm.

You’d have to expect an almighty shitfight. It’s beyond belief, we didn’t see this coming at all,” said one senior Age editorial staffer.

They foreshadowed an outpouring of vitriol on the steps of Media House: “There is a lot of anger here, and on the newsroom floor there’s talk of a strike.”

Crikey understands The Age currently employs 72 full-time subeditors. Of those, 45 will be given their marching orders with some lucky layout subs apparently avoiding the chop. The Herald and the Sun-Herald will lose 40 subs and gain around 15 reporters, five whom will be senior. There is currently no indication on the number of new hires on The Age.

Last week, at farewell drinks for the SMH’s chief subeditor Tim Vaughan, the legendary figure foreshadowed the move, slamming the company that is about to receive a massive financial windfall from Fairfax as “Pagef-ckers”.

The announcement of the sackings came as the ailing media giant issued a profit warning highlighting continuing soft revenue growth as its share price tanked by 9%.

Fairfax said earnings before interest, tax, depreciation and amortisation (EBITDA) would fall about 6% to $600 million this financial year, down from $639.1 million previously. Second-half revenue was down 4.5% from a year ago, while costs for the period were up 1%.

Subeditors contacted by Crikey were unaware of either announcement, with many yet to clock on for the day’s work. Fairfax blamed the timing on the fact the information was “market sensitive”, however the deal had been worked on for weeks, according to internal Pagemasters emails obtained by Crikey.

There are clusters of reporters shocked and appalled at the gutless announcement while subs aren’t here,” said senior Age staffer. “Why would subs even bother coming to work? Reporters who liaise with subs for layout and word subbing don’t want to deal with a faceless person in Botswana or Bombay, or wherever they are based.

How embarrassing for a daily broadsheet. Why not outsource everything and make it a virtual newspaper?”

Media Entertainment and Arts Alliance federal secretary Chris Warren was similarly scathing, noting the decision would lead to the loss of “hundreds” of jobs.

The Media Alliance is disappointed by the company’s decision to renege on its commitment to quality, independent journalism,” he said. “At a time when Fairfax is looking to invest in the future of quality journalism and the development of market-leading cross-platform news content, taking the specialised skills and expertise of subeditors out of the newsroom is grossly misguided.

Not only will it impact on the quality of all Fairfax products and compromise the ability of newspapers to quickly respond to breaking events, the contracting out of subediting work will diminish the local knowledge so important to the quality of our local newspapers.

This decision ultimately means less specialised, local and professional journalism from one of Australia’s largest media companies.”

Hywood buried this morning’s announcement in an email to staff that began with claims he was about to increase the company’s investment in “quality, independent journalism”. He said the changes were “logic-driven”:

To achieve this we are restructuring the way we produce our newspapers.”New workflow and work practices will be introduced which will not only facilitate the investment in journalism, but will underpin quality…

As you will be aware, Pagemasters has been successfully producing many of the sections for our metro mastheads for the past three years…

This is not an unprecedented decision. Pagemasters and other independent production houses now produce many high-quality newspapers around the world.”

In a separate communique, Matthews, the recently appointed tsar of Fairfax’s metro operations, echoed his boss’ sentiments but admitted the “tough choices”, while right from a strategic standpoint, would “have an impact on people currently in the business”.

We know we cannot simply cut our way to success,” he wrote. “We must focus on a path to sustainable growth that will deliver Fairfax a strong future…” The ex-digital boss said he had recently traveled to the US and UK to observe the carnage cause by a failure to slash and burn before profits plummeted.

Matthews said he had “processes in place” to ensure the paper didn’t turn up with spelling and syntax snafus and that new “outsource centres” would be established in Sydney and Melbourne.

Elsewhere , Hywood made repeated references to a greater investment in writers and journalism at the Sydney Morning Herald, The Sun-Herald, The Age, The Sunday Age and The Canberra Times, stoking suggestions that ex-Telegraph editor and keen scribe Garry Linnell would soon be hired as an expert correspondent. While there was no official specifics on numbers, it seems the neglected Fairfax trainee program will be revived from its current single-digits status.

Hywood, a once-popular former Australian Financial Review editor, said efficiency gains would also be realised from New Zealand operation and through a rationalisation of the company’s printing and distribution operations, presumably in league with News Limited.

Hywood told Crikey this morning he “was in a meeting” and “couldn’t talk” when further details were sought.

The market was also unforthcoming: as Crikey’s deadline approached, Fairfax shares had tumbled by nearly 9%, or 11.5 cents, to $1.19 against a 1% fall in the broader index.

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  • 1
    Space Kidette
    Posted Tuesday, 3 May 2011 at 2:02 pm | Permalink

    Whether print media want to accept the realities or not, the times are a changing. Technology is changing the world, especially with the advent of social media.

    The media have arrogantly watched plunging reader numbers, and declining revenues and bagged new media bloggers as irrelevant. Well, ignore the future at your peril. These are the opening salvo’s of change in the media.

    Additionally, the 24 hour news cycle means readers can see for themselves exactly what is happening as it happens, and they no longer require analysis. Readers can analyse the situation for themselves, rendering the media and their factless opinions, irrelevant.

    If you fail to add value, you cease to exist in the minds of the reader.

    Get in front of thetechology trend and begin to add value or you will be left behind.

  • 2
    SiobhanA
    Posted Tuesday, 3 May 2011 at 2:03 pm | Permalink

    I dare say it’s probably grammatically correct, but sheesh that title is awkward!

  • 3
    Frank Campbell
    Posted Tuesday, 3 May 2011 at 2:22 pm | Permalink

    This is same Greg Hywood who was spruiked as a boss (at last) who “understood journalism” - because he was a journo…

    And the same soft-spoken Hywood who caressed a very respectful Jonathon Holmes to sleep on Media Watch last week…Holmes seemed reassured, and rested, after the experience. Hywood was like a fox discussing cuisine with an elderly chook.

    The giveaway in this piece is: ” A planned net annual saving of $3 million from the Herald editorial budget was a “lame outcome from an operation turning a net profit of $2.2 million a week.”

    Quite. Fairfax just want to be rid of the subs. So much so they’ll spend $25m now to get rid of them.

    Crikey may yet have to turn into a real newspaper…

  • 4
    Pete from Sydney
    Posted Tuesday, 3 May 2011 at 2:35 pm | Permalink

    Agreed Siobhanna, Crikey could do with a couple of decent subs themselves, the error levels in the newsleter are on the increase

    Hey Space Kidette, what planet did you get that from….”they (the Readers) no longer require analysis”? says who? Analysis is king, not bloggers or tweets….12 million tweets per hour on Bin Laden, not terribly many would have added anything to the debate I’d wager, yet newspapers sales around the country were up…people wanted information not opinion

  • 5
    sharman
    Posted Tuesday, 3 May 2011 at 2:38 pm | Permalink

    What quality journalism? The media in Australia simply rehashes government information releases, publishes gossip or tries to make a story out of a politician saying something inept. I thought the Crikey story a few months ago about journalists whinging because the governement made FOI releases public was hilarious. I would have thought that if a competent person had been reseaching a story for MONTHS they might be able to come up with a story before someone who had only looked at it for five minutes. Apparently not!

  • 6
    Space Kidette
    Posted Tuesday, 3 May 2011 at 3:10 pm | Permalink

    Pete from Sydney,

    When the readers are seeing statements from Obama live, they don’t need analysis from anybody else to tell them what they have seen . The planet I am from is that I take information in and frame my own opinion. I don’t watch something and then want to be given my opinion by the journo’s who have seen as much as I have.

    Analysis is KING. But tell me, have you seen much lately? No, it is opinion, has little to do with the facts and usually they have not done anything like analysis, simply regurgitate Press releases.

  • 7
    donica
    Posted Tuesday, 3 May 2011 at 3:11 pm | Permalink

    What’s a pagemaster? @Siobhan I agree with you.

  • 8
    Sir Lunchalot
    Posted Tuesday, 3 May 2011 at 3:13 pm | Permalink

    Their cisculation figures are terrible.

    Look at the AFR, its dropped to around 75,000 a day, cause $3 is too expensive for what you get (corporate press release info) an a few comics and ads

  • 9
    chpowell
    Posted Tuesday, 3 May 2011 at 3:14 pm | Permalink

    @Space Kidette: ‘..These are the opening salvo’s of change in the media’.

    Oh, dear. Where’s a sub editor when you need one?

    re: Australian broadsheets in general: there’s not enough news to support dailies. There should be three a week-and a weekend edition.

    Walter Cronkite’s take on the subject: “Too may reporters, not enough news”……!

  • 10
    davirob
    Posted Tuesday, 3 May 2011 at 3:54 pm | Permalink

    Long term Age reader here,25/30 years.Maybe not what the Age should do but what I’d like.Full time rolling updates and analysis of any situation/circumstance/national/international by well informed intelligent journalists,neither particularly left or right.Don’t fill space just because you have to.Come up with other ways to entertain us/movies /book/food/sport/product reviews/could be from multiple sources but one easy lazy source for me/etc with flair.When ever I click I want to see what’s going on now/immediacy is all(not like over the weekend or the ABC at Xmas)and for coverage like this I would pay.I know you can shop around for this but I like to shop in my backyard first then move on. Layout,it’s got to be good,clear an accessible.Crikey are you listening?Maybe I’m being impractical but hey………..Re: the ABC,I know they’re still there but it amuses me how they get all angsty through the year an all bugger off for a month or so at xmas.

  • 11
    Space Kidette
    Posted Tuesday, 3 May 2011 at 4:22 pm | Permalink

    CHPOWELL,

    Get over yourself. I am making a comment on the blog. If I wrote newspaper articles for a living you would be justified in calling the grammar police.

  • 12
    Chalk
    Posted Tuesday, 3 May 2011 at 4:51 pm | Permalink

    Yeah CHPOWELL - you might want to check the spelling in your Cronkite quote too….

  • 13
    zut alors
    Posted Tuesday, 3 May 2011 at 6:38 pm | Permalink

    @ Frank Campbell: ‘Hywood was like a fox discussing cuisine with an elderly chook.’

    Sublime. This is basically what I was thinking while watching the interview but you’ve articulated it perfectly. One could sense - but not see - the satisfied smirk on Hywood’s face.

  • 14
    The_roth
    Posted Wednesday, 4 May 2011 at 11:04 am | Permalink

    Running a newspaper would be wonderful if it wasn’t for all those pesky journalists and a lack of readers!

  • 15
    Ian Jessup
    Posted Wednesday, 4 May 2011 at 2:06 pm | Permalink

    I regularly see typos on smh.com.au. Pot? Kettle?

  • 16
    Sir Lunchalot
    Posted Wednesday, 4 May 2011 at 2:12 pm | Permalink

    Look at type on Daily Tele website now

    Daughter saw OBAMA shot dead

    is President Obama dead?

    see RHS of home page

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