Media giant Reach plc could cut more than 500 jobs under plans to cut costs in a major restructuring
Reach, whose brands range from the Mirror and the Express to regional titles such as the Manchester Evening News and BusinessLive, says it has been hit by the effects of the coronavirus pandemic and lockdown, combined with long-term changes to the media industry.
The group hailed its success at meeting its 2.5m customer registrations target and said it had seen some improvement in advertising revenues as lockdown restrictions have eased.
It unveiled plans to make £35m in cost savings and said that it expected a reduction in headcount of around 550 people - some 12% of its workforce.
Reach today said its revenue for the second quarter fell by 27.5% on last year, driven by reductions in circulation and advertising. Things improved slightly in June, with revenue down 23.9%
The company’s digital audience continued to grow, with over 41 million unique visitors during May.
Customer registrations passed the 2.5m mark for first time - exceeding Reach’s previous target for the end of 2020. The group has now raised its 2022 customer registration target from 7m to 10m.
Reach has also vowed to create “an improved digital customer experience across all newsbrands and products”, and to introduce a new self-serve digital platform for digital advertisers.
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The company has also ended the temporary pay cut it introduced for all staff during the coronavirus pandemic, apart from for board members whose pay will still be reduced by 20%.
Reach said today’s restructure would involve bringing together regional and national teams together to create “a streamlined, efficient organisation with more focussed editorial, advertising (solutions and local commercial) and central operations”.
CEO Jim Mullen said: "Structural change in the media sector has accelerated during the pandemic and this has resulted in increased adoption of our digital products. However, due to reduced advertising demand, we have not seen commensurate increases in digital revenue.
"To meet these challenges and to accelerate our customer value strategy, we have completed plans to transform the business and are ready to begin the process of implementation. Regrettably, these plans involve a reduction in our workforce and we will ensure all impacted colleagues are treated with fairness and respect throughout the forthcoming consultation process.
"The plans will provide a stable platform for us to accelerate our strategy, based on stronger and deeper customer relationships, increasing our appeal to advertisers. This will ensure the sustainability and profitability of the Reach business, enabling it to deliver to stakeholders over the long-term.
"Award-winning journalism and content will always be at the core of our purpose. Through the transformation, Reach will realise the full potential of its business model, enabling our news brands to continue to shape the daily conversations of millions of people for years to come."
The company added: “The transformation will ensure the company's leading national and regional titles will continue to deliver quality news and content across print and digital channels for the long-term.”