Fairfax Media CEO Greg Hywood ‘won’t be dissuaded from making the right decisions’ by strike action

Fairfax Media CEO Greg Hywood has said the job cuts announced yesterday are part of “completely resetting existing models” which is needed to address structural challenges the company is facing.

Greg Hywood: Quality journalism will remain at the core of our future sustainable model

Speaking at this morning’s Macquarie Australia Conference just one day after the company – which publishes The Sydney Morning Herald, The Age and The Australian Financial Review – announced 125 editorial jobs are to be axed as part of a $30m restructure, Hywood acknowledged it was a “tough decision”.

“Our three publishing businesses have made considerable progress in transforming to more sustainable models,” Hywood said.

“Clearly we have made some tough decisions to make our publishing division sustainable. We don’t back away from it – and are glad that we started getting it in order five years before most other media companies began to face the global and local industry realities.”

Hywood’s speech came as Fairfax Media journalists strike against yesterday’s job cuts announcements, with journalists picketing his arrival at today’s conference.

Fairfax staff preparing to walk out yesterday

Hywood said: “We respect our staff for the passion they have for independent, high quality journalism. We share it – but we know what it takes to make our kind of journalism sustainable. Passion alone won’t cut it.

“This is the not the first time we have had industrial opposition to what we are doing – we won’t be dissuaded from making the right decisions – and we will get our digital and print editions out through this period.

“It is self-evident that publishing was facing structural challenges and these could only be addressed by completely resetting existing models.”

Hywood said the company has reduced publishing costs by more than a net $400m over the past five years.

“Publishing cash flows have been invested in creating new growth businesses, as well as substantially de-risking the transition to digitally-driven futures.”

Hywood revealed The SMH, The Age and The Australian Financial Review “have more than 226,000 digital subscribers”, with each title delivering growth.

Referencing the speech Hywood made at the same conference last year when he said it was “inevitable” the company would close its weekday metro print editions, Hywood said the print newspapers will continue to be printed daily.

“We are re-building the technology, processes and teams supporting publishing – all at a fraction of the cost of maintaining our legacy systems,” he said.

“This allows us to fundamentally reset the publishing cost base and reposition our product suite to deliver better commercial and customer outcomes.

“The result will be a cheaper and higher quality digital publishing model, still with the core of quality journalism that we are committed to. Our print newspapers will operate separately and we believe we will continue to provide a positive cash-flow contribution for some years yet.

“Having considered all options, we determined that the best commercial decision, based on current advertising and subscription trends, was to continue to print our publications daily, while developing significantly enhanced digital propositions.”

Hywood said in FY18 the industry will see “some of the major milestones” in the company’s publishing innovation with a “new product pilot in a smaller market”.

“This will be followed by the launch of new platforms for the SMH, The Age, The Australian Financial Review and Lifestyle mastheads, along with new apps for the SMH and The Age.”

Hywood’s comments came as the company posted a trading update to the ASX which revealed Group revenues for continuing businesses are 6% below last year for the first 17 weeks of FY17 H2.

Domain’s overall revenue is up 10% while Metro Media is down 11%.


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