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Media

Jun 20, 2012

News Ltd restructure: merged divisions, no cuts ... yet

News Limited CEO Kim Williams has refused to say how many of the company's 8000 staff will be sacked in a homely video address to the nation this afternoon announcing his plans to slash the company's cost base.

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News Limited CEO Kim Williams has refused to say how many of the company’s 8000 staff will be sacked in a homely address to the nation this afternoon announcing his plans to slash the media giant’s cost base.

In the video announcement beamed to News employees across the country and taken live on 24-hour news channels, the freshman chief announced his long-awaited strategic rationalisation of Rupert Murdoch’s local outpost — cutting out its traditional federated structure and centralising editorial and sales arms.

But the news everyone was waiting for — the number of scalps Williams was plotting to remove from the business — was not broached.

Towards the end of the 13-minute address, the camera zoomed in on Williams’ face as staffers waited on tenterhooks for a pointer to their journalistic future. But Gough Whitlam’s son-in-law stayed mum.

“I understand that change on this scale creates uncertainly, but please focus on the big and exciting things we hope to achieve,” he said, adding the reforms were “best in class”.

“Regretfully a variety of positions will be made redundant, some of these will be through retrenchments, some of these through natural attrition,” Williams said, bolstering his reputation as new media’s velvet sledgehammer.

The doomed headcount will become apparent “over time”, Williams said, as the company transitions to a seven-day roster. “At all times people will be treated with respect and dignity.”

On Monday, rival Fairfax Media announced 1900 redundancies culled from the 10,000 staff stationed across its ailing business.

Williams confirmed he would proceed with the $1.97 billion $3.50-a-share takeover bid for James Packer’s Consolidated Media and the $30 million acquisition of Alan Kohler’s Australian Independent Business Media.

In a precursor announcement craftily leaked by senior News management to The Australian early this afternoon, the company said its 19 divisions will become five publishing houses in a “one city one newsroom” strategy.

The new divisions — spread over multiple physical sites — will comprise News NSW, News Qld, News Victoria, The Australian and NewsLifeMedia. It is not known what will happen to News’ Tasmanian operation, with one wag suggesting this morning that the Hobart office will effectively be run out of Southbank.

In Victoria, Williams announced that Herald & Weekly Times Managing Director Peter Blunden had “generously” agreed to cast his editorial eye across the state, in an extension of his current strategic oversight role. All Victorian editors will now report to Blunden, where previously some answered directly to Holt Street.

Williams was resolute on the need to embrace the digital age by decoupling content from the “channel” in which it is delivered to eyeballs: “We can no longer continue with a strategy that digital is something separate to the rest of the company.”

Journos would “create once and publish many times” though different channels “to create a viable and sustainable future”.

This presented an opportunity to build our business in “an amazing environment of change and opportunity”.

Williams revealed the new $60 million “Methode” editorial system will be brought forward by 2 years — from the previously planned 3 years to 13 months, alongside a strengthening of the News intranet.

Sales functions will also be further rationalised through the appointment of state-based sales tsars to be known as regional commercial directors. A product innovation team will also be created to scout for new revenue sources and delivery platforms.

Williams said content from Business Spectator and associated websites would be integrated into The Australian‘s online offering and that News would ramp up its focus on “innovation”, taking inspiration from the Wall Street Journal iPad app and the Herald Sun‘s hugely popular SuperCoach fantasy football site.

The announcement caused a mini-frenzy inside the nation’s online newsrooms, with former Crikey editor Misha Ketchell at one point popping up on Sky News to give his view on what it meant for journalism.

Journos’ union the Media, Entertainment & Arts Alliance cautiously welcomed the announcement but said staff would be concerned because “the extent of its planned redundancies during the restructure remained a mystery”.

“While the devil is still in the detail, and we are clearly concerned about the extent of redundancies being flagged by the company, we appreciate that News Limited is carefully considering its future and how it comes to grips with the ongoing transition to digital platforms,” said acting federal secretary of the Alliance Paul Murphy.

Local community newspapers could be affected by the “one newsroom” strategy — Crikey understands that rationalisation in some quarters has led to stressed editors having to file for multiple papers.

“No media outlet should be lured into the trap of allowing digital platforms to continue to ratchet up the intensification of work done by already overstretched editorial teams,” the union said.

Special internal spyware was installed last night on News Limited terminals for captivated staff to soak up their CEO’s pronouncements. The video was accompanied by silence across the various state newsrooms the company’s 3000 transfixed hacks tuned in.

One senior journalist called the address “a fizzer” as this afternoon’s broadcast petered out.

Additional reporting: Matthew Knott

The media release from News Limited

Full audio of Kim Williams’ announcement:

[podcast]http://media.crikey.com.au/wp-content/uploads/2012/06/kim-williams-june-20.mp3[/podcast]

Andrew Crook —

Andrew Crook

Former Crikey Senior Journalist

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