News Limited’s Melbourne arm has moved on its parent company’s plans to slash costs by 20% over three years, calling in Herald Sun staff with cash offers to leave the paper.

Crikey can reveal that two designers and least two others have been approached this week to quietly depart the Herald & Weekly Times’ Southbank HQ as part of a $17 million cost-cutting drive.

The Media, Entertainment and Arts Alliance told Crikey it expected more employees to be tapped on the shoulder before Friday. They said that the amounts on the table were significantly smaller than what would be owing under a fully fledged redundancy process.

Under their collective employment agreement, News is required to consult over any changes to the composition and numbers of the workforce. However, to date the union is yet to be formally notified.

In September, a leaked memo from News’ Sydney-based chief financial officer Stephen Rue stated that each division of the company would need to reduce costs by 5% against the full-year budget and the broader company 15-20% over three years. A hiring freeze was also implemented. The slash-and-burn diktat had been ticked off by Rupert Murdoch’s office and outgoing CEO John Hartigan — who has since relinquished the chance to see it though.

MEAA state secretary Louise Connor said the move was “abhorrent” and “classic News Limited”.

“It’s not technically illegal but what concerns us is the offer of these kind of fake redundancies that aren’t redundancies,” she said.

The EBA stipulates staff are entitled to two weeks salary and a further four weeks for each year at service, capped at 112 weeks. But the amount being talked about represented only about 50% of the money due.

“If the company thinks they can get away with offering a half-price deal they’ve got another thing coming,” she said. “It’s not about the employees, it’s about the numbers. News Limited should just be honest — it’s terrible to play with people’s minds and lives like that.”

Connor said that staff were under no obligation to accept the offer and advised them to consult with union delegates before signing anything. The MEAA would start talks with staff later today.

Herald Sun editorial manager Alan Armsden, a former Truth copy boy who often negotiates with the union, declined to expand on the payouts this morning.

“I don’t discuss company business with outsiders, mate, that’s the end of the conversation,” he said, before hanging up.

The decision to pare back wages is an industry-wide phenomenon. Both major newspaper duopolists have recently embarked on deep cuts to head counts, with Fairfax moving to partly close its Chullora printing plant with the loss of 100 jobs.

Delivering the AN Smith Lecture in Journalism last night at the University of Melbourne, a bullish Fairfax CEO Greg Hywood was unapologetic about the need to curb expenses, saying he had “no bones about” hacking in to the $500 million his company spends each year on printing and production.

The change had been wrought after the collapse of the company’s traditional printed classifieds, the so-called “rivers of gold”. Seventy per cent of print ads used to go to straight to Fairfax’s bottom line, Hywood said, compared to just 20% of the online equivalent.

“We are deliberately reducing our footprint,” he noted, before heading for private talks with dignitaries including university Vice Chancellor Glyn Davis.

But others were less enthusiastic, with respected Age turned Conversation editor Andrew Japsan overheard dismissing the address as “boring” as he departed the auditorium.

Peter Fray

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Peter Fray
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