Guardian Media Group is preparing to make major cuts to its editorial and business operations, citing an internal memo from CEO David Pemsel and unnamed sources at the publisher.
Politico first reported the news.
Pemsel painted a grim picture in the memo, warning employees: “This is shaping up to be one of the most difficult … periods we’ve faced in many years,” as print advertising revenues across the entire British newspaper industry are set to tumble 20% this year.
Digital advertising growth has slowed, Pemsel added, pointing to growing competition from tech companies like Facebook and Google.
As a result, GMG is being forced to reduce its forecast for the year, predicting total revenue growth of 2%, down sharply from previous estimates of around 6%, according to an unnamed source inside the company.
The memo then lays out a stringent cost-cutting program, including fewer new hires, smaller raises, and less spending on expenses like travel. Separately, several executives told Politico that substantial staff reductions will also be needed to stabilize the company’s finances.
As noted, GMG is hardly alone in facing a very challenging financial outlook, as other British newspaper publishers may be even worse off. Last month, the Daily Mail revealed that digital advertising growth had plunged from a rate of 50% last year to 16% this year, causing analysts to warn investors that the publisher was likely to miss its year-end revenue target of £100 million.
In a sign of how bad their situation has become, in September, British newspaper publishers formed a promotional alliance including the Sun, Mirror, Daily Mail, Telegraph and Guardian, which launched a two-month, multimillion-pound ad campaign promoting the power of news brands.