The editor of The Daily Telegraph, the controversial Paul Whittaker, is in the firing line at News Limited as new CEO Kim Williams introduces a top-to-toe renovation.

Meanwhile, in shortly to be announced changes, group marketing director Ed Smith is expected to move to Foxtel, and Foxtel’s head of lifestyle channels Nicole Sheffield will take up the position formerly held by Sandra Hook, who resigned as head of News’ magazine division NewsLifeMedia last week.

In a continuing raft of resignations, moves and alterations, Williams is also expected to replace the corporate communications director Greg Baxter, who announced his departure yesterday, with Adam Suckling, the urbane policy and communications director from William’s previous Foxtel patch.

Many more changes are in the wind, with Williams having made it clear to his team he wants to bring in his own management nous. Those whose position rested firmly on good relations with former CEO John Hartigan are feeling chill winds.

Whittaker’s tenuous position is the talk of the newsroom. We put in calls to him this morning but didn’t hear back.

But of greater long-term significance than the changing faces are planned wholesale changes to reporting lines and structures.

Under Hartigan, editors had a hotline direct to the top. This was one of the things that made being a News Limited editor such a powerful position.

Williams is said to be keen to introduce a more conventional management system, with editors answerable to their divisional CEOs and through them to Jerry Harris, whose appointment as managing director of group newspapers and digital products was one of the first changes Williams made to senior management.

Apart from the departures of members of senior management, it is worth noting how recent editorial changes have been announced. Under Hartigan, news of editorial appointments would have come from his office. But recent editorial appointments, such as new editors at The Mercury and The Cairns Post, have been announced instead by group editorial director Campbell Reid. The tea leaf readers are seeing this as signalling a change to a more rational system of management at News.

Those who are on the outer describe Williams’ style as one of micromanagement. Others say he is a more strategic thinker than Hartigan, but also tough and directive. Where Hartigan let many people, including the editors, have their heads, Williams is more likely to say what he expects to be done and how he expects it to happen.

Plans to introduce paywalls at the metropolitan dailies are so far going ahead apparently unaffected, with the Herald Sun still steaming ahead towards a March date for the erection of a subscription paywall.

There are plenty of collywobbles about this move internally, though, and I gather that in other cities the word is the success or otherwise of the Herald Sun will be carefully watched and assessed before any decision is made about when and whether they will follow suit.

Some state-based mastheads, which were ready to move to paywalls at short notice, have sensed a reduction in urgency. The timelines have gotten longer.

The Herald Sun insiders are aware that a main plank in the paywall strategy, their coverage of sport, is contested by beefed-up free sites such as AFL.com.au. One source said: “Nobody inside News Limited actually thinks the paywalls for the tabloids is a good idea. It is being driven by Rupert.”

Insiders expect Williams, whose Foxtel experience is all about persuading people to pay for content, to be taking a close look at the subscription model plans. Meanwhile, people employed at News Digital are feeling the chill winds, with the word being Williams thinks the division is overstaffed.

All this is happening as the early starters who signed up for a free three-month trial of The Australian’s paywalled site are getting the first emails asking them to pony up $2.95 a week for digital-only access, or $7.95 for online and the hard copy of the paper home delivered.

And meanwhile Greg Hywood, CEO of Fairfax, remarked late last year that Fairfax Media’s metro mastheads might never introduce a paywall, a remark that was well analysed by Alan Kohler in this piece.

By the middle of this year we will have some idea as to whether paywalls will work in the Australian media scene — and for what kind of content. Williams is as well equipped as anyone to make that call, thanks to the solid foundation of his Foxtel experience.

Meanwhile at least some News Limited managers who had been previously been told to cut costs by 5% in the current financial year — part of a cost-cutting goal of 15-20% over three years — have now been asked to find a total of 6% in cuts this reporting year.

There are other rumours flying about, which I have not been able to confirm. Some are speculating about why the editor-in-chief of The Australian, Chris Mitchell, reportedly took an extra week’s leave.

3.31pm UPDATE: Chris Mitchell’s office has been in touch to assert that he always intended to return from leave today.

25/1/2012 UPDATE: Please see Margaret Simons’ follow-up story.

Peter Fray

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