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Two women walk past the entrance of the offices of The Guardian and The Observer newspapers on August 5, 2009 in London, England.

Oli Scarff/2009 Getty Images



Guardian News & Media plans to cut £25-million ($36.7-million) of costs at its print operations over five years as the publisher of The Guardian and The Observer launches another overhaul in an attempt to stem years of losses.

Andrew Miller, chief executive of the parent company Guardian Media Group, told staff: "In the fictional scenario that we do nothing and we don't realize value from our portfolio, then GMG could run out of cash in three to five years."

The "major transformation programme" will involve redundancies and may reduce the number of pages in the weekday editions of The Guardian.

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The cost-cutting comes as GNM is expected to report losses of £35m in the year to March 2011.

The company said it aimed to shift from print to online journalism and to develop a new kind of newspaper coverage, which in the words of Alan Rusbridger, the editor-in-chief, would be "more Newsnight than News at Ten", focusing on analysis rather than reporting.

The moves follow a series of ineffectual attempts by The Guardian to stem the tide of falling advertising and a drift to online readership. In the past four years, Guardian Media Group has seen public recruitment advertising fall by £40.7-million and other display advertising by £17-million.

Mr. Rusbridger told staff on Thursday that the restructuring was a response to "inexorable trends" in media consumption. He said GNM would move "beyond the newspaper, shifting focus, effort and investment towards digital, because that is our future". The £25-million savings are to be reinvested in digital operations, including Guardian.co.uk, providing news to mobile devices, and development in the US. GNM is to go into consultation with unions.

The group has no plans to close print sites but will be looking closely at its physical print infrastructure, a person familiar with the plans said.

"We will also be changing the printed Monday to Friday newspaper to take account of changing patterns of readership and advertising," Mr. Rusbridger said. "Half our readers now read the paper in the evening: they get their breaking news from our website or on mobile."

GMG's pre-tax losses for the year to March 28 rose 77 per cent on the previous year to £171m, mainly driven by impairments.

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