Fairfax Media job cuts trigger industrial action

Journalists at one of Australia’s best-known newspaper publishers, Fairfax Media, plan to strike for seven days in protest at the company’s plans to cut the equivalent of 125 full-time journalist positions, or one in four from the already depleted newsrooms. The cuts are aimed at saving 30 million Australian dollars ($22.2 million) annually.

After years of cuts and shrinking staff numbers, journalists at once-prestigious titles the Sydney Morning Herald, The Age and the Australian Financial Review again took to the streets to fight for their jobs and their newspapers.

Fairfax Media has cut A$400 million and nearly 500 journalists in the past five years, and the planned cuts would leave the titles hard-pressed to cover anything other than a slim selection of daily breaking news.

In line with the slow decline of newspapers in much of the developed world, Fairfax titles have been struggling for many years. When Fairfax Media posted an A$893.5 million loss for the financial year 2016, mostly due to write-downs, while revenue fell 2% to A$1.8 billion, many observers knew more cuts were on the way.

Regular redundancy rounds and stringent cost-cutting has failed to offset shrinking income, and on Thursday the company announced revenue had fallen 11% since Christmas for both its Metro Media section (including the Sydney Morning Herald and The Age) and its Australian Community Media business.

At an investor meeting in Sydney on Thursday — which was picketed by Fairfax journalists brandishing “I love the SMH” placards — chief executive Greg Hywood said the company’s news operations were moving to a more sustainable and digitally focused model.

“Make no mistake, we believe this is the sustainable publishing model of the future,” he said, according to Australian Associated Press. “We are developing a suite of new digital products to create deeper and more engaging experiences for our audiences, while sustaining a commercially successful print proposition.”

Existential risk

Fairfax journalists say they are dismayed by what they see as the short-sightedness of management, and its refusal to negotiate. The Sydney Morning Herald’s state political reporter Sean Nicholls told reporters: “The future of Fairfax newspapers is existentially at risk.”

The one-week strike, which could affect the papers’ coverage of the federal government’s budget on Tuesday, should wake Fairfax management up, he added. “This threatens the very existence of our newspapers, let alone the very quality of our newspapers.”

Nicholls said the scale of the cuts was unprecedented. “We’re looking at 125 journalists’ jobs — that’s one in four of every Fairfax metropolitan newspaper in Australia,” he said. “That is shocking and we condemn management who have tried to cut their way to quality, which is absolutely impossible, and the fact that they have failed again to try and find an alternative solution.”

Once respected broadsheet titles in their respective cities of Sydney and Melbourne, and earning vast sums from the “rivers of gold” of seemingly endless pages of classified advertisements, the Sydney Morning Herald and The Age have downsized from broadsheet to near-tabloid in size. They have launched websites that veer from serious to salacious, and lost much of their influence in the internet age.

Yet without the Fairfax titles, Australia’s two biggest cities would effectively become one-newspaper towns, and both the remaining newspapers are from the Murdoch-owned News Corp Australia stable. News Corp has a firm hold on the Australian media with newspapers, including the flagship broadsheet The Australian, and tabloids in Brisbane, Sydney, Melbourne, Hobart and Adelaide.

Diminishing returnsNews Corp has also been forced to rein in expenditure in the face of diminishing newspaper returns, and in April sacked most of its photographers and sub-editors. In February, the company posted a second-quarter loss of A$287m and cited impairments in the Australian newspaper industry as an important element in the losses.

Fairfax appears to be set on a plan to focus on “quality stories” that win increased engagement from digital readers. Hywood told the investors’ meeting that “average audience per story has increased by more than 30% in early trials of this approach.”

He insisted that Fairfax still had the trust of readers. “These attributes of trust and quality are more important and relevant than ever in an environment of ‘fake news’ and risks to brand safety being played out at YouTube and others,” he said. “Fairfax’s 186-year-old track record of independent, quality journalism and content sets it apart as the trusted voice and venue for consumers and advertisers.”

Fairfax journalists passed a resolution at meetings this week to demand senior management take a 25% pay cut.

Paul Murphy, chief executive of the Media, Entertainment and Arts Alliance journalists’ union, said Fairfax management looked at the business the wrong way round. “None of the other parts of the Fairfax business are worth anything without the journalism and yet it is the journalism that Fairfax always cuts,” he said.

Fairfax was also facing obstacles across the Tasman Sea, where New Zealand’s competition watchdog this week blocked a potentially profitable merger between the country’s two main newspaper groups, Fairfax NZ and New Zealand Media and Entertainment, in an effort to maintain media diversity.