Another week, another round of cuts at a major media organisation. This week in the UK it was the turn of the Guardian, which has announced that it is to cut 180 jobs and scrap its Weekend, The Guide, Review and Travel print supplements from its Saturday edition.
The mood at the paper is, understandably, low. Though management has not ruled out compulsory redundancies, there is little expectation that they will be tried. Recent lay-offs have always been voluntary, at least for the editorial teams, which have one of the few strong union presences left in Fleet Street. And in the unlikely event there is an attempt to force compulsory redundancies, it will be resisted strongly by journalists across departments – not just those whose jobs might be under threat.
There is also some disquiet among staff that, while the job cuts were announced to all staff simultaneously, some found out that the Saturday supplements would close via Twitter rather than a follow-up communication from management.
There are also concerns that readers will stop buying the Saturday paper – still far and away the most popular print product – once, as expected, the standalone sections are collapsed into one package.
The targeted nature of the changes looks designed to deliver the Guardian’s restated aim of becoming “digital first” (something it has repeatedly talked about over the past decade). Much of the content in the supplement sections, such as book reviews or TV guides, does not do well online, and producing them requires print skills and resources that don’t translate easily to digital.
However, the fact that compulsory redundancies won’t be used may make refocusing difficult.
Why has the Guardian had to begin cutting again? The given and main reason is the pandemic, which has decimated newspaper sales and led to huge falls in advertising, both in print and online. The Guardian has told staff that coronavirus has blown a £25m hole in its budget for the year. Many other media organisations have already announced swingeing cuts as a result of the same forces.
This is happening at a time when the media was already in trouble due to long-term shifts away from the print model. Fewer people buy newspapers, there are more online sources of news and entertainment available, and lots of other places to spend money on advertising – most significantly, Google and Facebook.
Though the Guardian was able to report success in halting its multi-million pound losses in the last financial year, that process took a herculean effort of cost-cutting and financial management. There was not a lot of capacity to cope with a pandemic.
The Scott Endowment, the pot of investments held by the newspaper’s ultimate owner to fund its continued existence, stands at £954m, down 6 per cent on 2019 due largely to the coronavirus’ impact on the global economy. The fund is the result of the sale of the Guardian’s stakes in a number of media groups, the bulk of which came from car classifieds business Auto Trader.
The Guardian has gone through multiple rounds of redundancies over the past decade as it racked up annual losses in excess of £20m, peaking at £57m in 2015/16 and with total losses since the financial crash of 2008/9 approaching £300m. Its total editorial and production staff headcount stood at 869 in its last financial year, down from a peak of over a thousand in 2016. That is still bigger than UK competitors such as the Telegraph, though much smaller than the likes of the New York Times (the kind of global player the Guardian aims to be) or DMGT, the owner of the Daily Mail, i and Metro, as well as a host of B2B businesses.
The Guardian’s US operation is much diminished, having failed to hit revenue targets set when the outlook for digital advertising on news websites was much rosier. In 2016, it made a loss of more than $15m, having taken in roughly the same amount in sales, though the loss was dwarfed by the those across the rest of the business.
What isn’t responsible for the Guardian’s current financial problems is its politics. On Thursday (16 July), I tweeted that some on left shouldn’t be crowing about the diminishment of one of the few left-of-centre major news organisations in the English language. A number of those replying suggested the newspaper’s troubles were down to readers deserting it over its coverage of Jeremy Corbyn. Indeed, Corbyn’s partner Laura Alvarez tweeted yesterday: “For our mental health and future it’s important to stop buying the Guardian.”
A look back at the newspaper’s circulation over the past half-decade shows no discernible change in circulation declines between Corbyn’s leadership and the 18 months that preceded it:
During this period, online readership has reached levels that greatly exceed any reach the title had in print. It has hundreds of thousands of people paying for membership, giving it a legitimate claim to having more paying readers than ever before (even if most aren’t paying as much as newspaper buyers would). The reason that the Guardian is selling fewer print copies is simply that the internet is reducing demand for newspapers everywhere.
There is, of course, a debate to be had about whether the Guardian should charge for access to its site, rather than depending on readers to support it out of the goodness of their hearts. The Guardian‘s leadership has never wavered in its commitment to keeping most, if not all, its output free to access. The paper’s constant badgering of readers for money makes any reversal of that policy difficult.
In any case, the objectives of the Guardian‘s ultimate owner, the Scott Trust, may be to keep the title alive “in perpetuity”, but it also believes maintaining the newspaper’s global impact is part of that mission. A total audience in the millions each day (the website received 2bn page views in March and April this year) is a decent measure of impact, and one that a paywall would almost certainly curb.
Some on the British left may be angry with the Guardian for its coverage of Corbyn. If my Twitter mentions are anything to go by, a number of Twitter users would not consider the title to be left wing at all; though on that point I would urge them to look at the rest of the media, and at a country that voted in a Conservative government by a landslide last year.
What is causing the Guardian trouble is an economic shock coupled with long-term structural issues – two problems that are also affecting huge numbers of other publications. That’s a problem for a society that has not come up with a decent plan for replacing journalism’s role in the world, and which is a lot bigger than any animosity towards one newspaper.
This piece was updated on 20/7/20 with figures on the endowment fund, staff headcount and US operation.