DMGT warns of up to 1,000 redundancies at Northcliffe

23 March 2009

Business

Planned redundancies at local newspaper publisher Northcliffe Media are likely to be double initial estimates and reach nearly 1,000, parent group DMGT has confirmed.

The company announced its trading update this morning, ahead of its half-year results, which are expected on 29 March.

DMGT said in the statement that its full-year results would be in line with forecasts, which would result in a "substantial" fall from last year's first-half results.

Initially, DMGT expected to make 500 redundancies at Northcliffe between October 2008 and September 2009, however, according to the statement, this number is set to double, reducing the number of staff to around 3,500.

A spokesman for DMGT told PrintWeek: "The majority of these redundancies have already taken place or are currently in consultation."

The spokesman could not confirm how many of the 1,000 jobs, which are set to give DMGT around £20m in cost savings, are at Harmsworth Printing, DMGT's print arm.

This week will see a consultation at Harmsworth Leicester come to a close, with 66 jobs under threat.

At the end of last year, Harmsworth announced the closure of its Grimsby site, with a further 55 jobs being cut.

Revenue for the period fell 12%, with advertising revenue at DMGT's national newspaper division Associated Newspapers dropping 24% and Northcliffe's ad revenue plummeting 37%.

DMGT said "some degree of stabilisation seems to be occurring at the moment and into April". It added that revenue and cost initiatives of £100m would be exceeded.

However, Andy Viner, head of media at BDO Stoy Hayward, claimed the announcement was not all doom and gloom for the newspaper industry.

He said: "While the company expects a 12% decrease in consumer media revenues for the first five months of the financial year, on a more positive note it anticipates a 15% increase in B2B revenues.

"This is the result of its long-term strategy that is diversifying away from consumer titles with a greater focus on B2B titles, which are more resilient.

"In addition, DMGT has suggested that classified advertising sales are now stabilising – a statement that will be warmly welcomed by many in the industry."

The redundancies reflect the pressures on the local newspaper market being felt across the industry as advertising spend and sales fall.

Earlier this month, Johnston Press raised fears over its ability to trade as a going concern if it was unable to restructure its debt or dispose of its Irish titles.