“People are working out if they can even afford to get their family Christmas presents this year,” says one of the 450 staff at risk of redundancy at Reach, owner of the Mirror, Express and scores of local newspapers, in brutally timed job cuts that will run into the new year.
The grim reality facing the workforce is testament to the increasingly parlous state of the UK’s largest commercial news publisher, whose titles also include the Daily Star, the Daily Record, the Manchester Evening News, the Liverpool Echo and the Live network of local news websites.
Shell-shocked employees are weighing hitting back with a ballot for industrial action and strikes as Reach pushes through its third round of cuts in less than 12 months – culling close to 800 roles in total – the biggest annual loss of jobs in the UK newspaper industry for decades.
“The last round of redundancies left my mental health in pieces and suicidal,” one staffer posted in an online forum during a heated online internal town hall session with management after the latest announcement. “My wife cuddled me on the floor while I sobbed for 10 minutes. Do you realise the damage this is doing to your workers’ mental health?”
Jim Mullen – the chief executive of Reach since 2019, a year after it changed its name from Trinity Mirror – has not ruled out further cuts, telling staff the company must “set ourselves up to win” in an “increasingly fast-paced, competitive and customer-focused digital world”.
Reach’s network of 130 national and regional websites attracted an audience of 35 million visitors in September, making it Britain’s biggest UK newspaper group and the sixth biggest online organisation in the UK after the Google owner Alphabet, Meta, Amazon, Microsoft and the BBC, according to Ipsos Iris research for Press Gazette.
However, the problem is Reach’s digital commercial strategy is going backwards, which the company blames on Meta-owned Facebook and other large media platforms moving to deprioritise news.
Reach reported a 16% decline in digital revenues in the first half, and a further 13.7% in the third quarter, as online page views slumped by 21% year on year in the first nine months. The company, which has been criticised for offering a poor digital reader experience overloaded with advertising banners and pop-ups, says it will report a decline in digital revenues of £21m year on year in 2023 to just £127.8m.
“The digital strategy is a complete failure, that is borne out in the numbers,” says Alex DeGroote, a media analyst and a former adviser to Reach. “Digital revenue is in decline, it shouldn’t be that way, not in 2023. Like all publishers Reach held great hopes for digital revenue, the holy grail to balance declines in print, but in reality in commercial terms the company remains essentially an old school analogue business.”
Other newspaper publishers have diversified their digital strategies by building subscription and reader revenue offerings, but Reach – hampered by owning titles that arguably will not support initiatives such as paid-for, ad-free and metered access at scale – has focused almost solely on digital advertising.
Reach has been a leading industry consolidator, striking two of the biggest newspaper deals of recent years in an effort to build scale to compete digitally, increase revenues, drive cost efficiencies and bolster its traditional business. In late 2015, the company paid £220m to buy Local World, cementing its position as the UK’s largest regional newspaper publisher. In 2018 it struck a £200m deal to buy the print assets of Richard Desmond’s Northern & Shell, home to the Express and Star national titles.
The strategy increased annual revenues from £592m in 2015 to £724m in 2018, while staff numbers rose to almost 5,500. After the latest cuts that figure will fall to about 3,500 – 36% fewer workers than when it embarked on its expansion strategy in 2016 – with staff so stretched there are fears that regional newspaper publishing is close to crisis point. Reach’s office in Newcastle faces potential closure, while the Bristol office is being replaced with an “editorial meeting space”.
“It feels like the end of days,” says one staffer. “Barring a sale to someone with the vision and investment funds that Reach doesn’t possess, the failure of the company’s business model poses big questions for the future of British journalism.
“It’s increasingly likely that many of our major cities, Manchester, Birmingham, Bristol, Newcastle, Liverpool, Cardiff and many others will soon have no local newspaper and no recognisable local news website holding local authorities and others to account.”
The wider decline in the newspaper market has hit Reach particularly hard, with total revenues for 2023 expected to be down to £560m – less than the level before the acquisitions of Local World and Desmond’s titles.
While cover price rises have kept newspaper circulation revenues stable since 2016, despite the continuing fall in sales as consumer habits shift online, print advertising revenue is worth £150m less annually. Digital advertising has doubled across the same period, but only makes £71m more a year than in 2016, a far cry from the dream of being able to compensate for the decline in traditional ad revenues.
Reach, which declined to comment for this piece, says it has been consistently profitable for decades and the cost-cutting plan puts it on track to make £95m in profits this year.
However, critics argue it has focused on returns to shareholders instead of investing in diversified businesses as rival groups have done, including the Guardian, Rupert Murdoch’s News UK and the Daily Mail owner DMGT.
“Reach today is really a pale shadow of what it was 25 years ago,” DeGroote says. “It has been a cash cow for decades and that hasn’t been used to successfully diversify at all. The business could have done anything, bought into radio or internet assets or done other things, but they have nothing to show for it.”
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