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Reach to axe 550 jobs after coronavirus hits business

MullenReach plc is to shed around 550 jobs after revenues were hit by the coronavirus crisis.

The regional publisher has this morning announced a restructure which will see around 12pc of its workforce, including approximately 325 working in editorial and circulation, leave the business in order to deliver £35m worth of cost savings.

The move will see the company switch to a more centralised structure editorially, bringing together national and regional teams across print and digital to “significantly increase efficiency and remove duplication”.

In a trading update issued this morning, Reach revealed group revenue for the second quarter was down 27.5pc compared with the corresponding period last year, with print revenue down 29.5pc and digital revenue down 14.8pc.

Circulation remains significantly below the level it was at before Covid-19 struck, with local advertising “continuing to be challenging”, although the company says it has experienced “modest but encouraging improvements” in circulation and national digital revenue as the government’s lockdown restrictions have eased.

Reach’s local commercial and finance staff will “move to fewer locations and a simpler management structure, with costs geared to current market conditions”, although the company says no office closures are planned as part of the measures.

It has declined to reveal how many editorial jobs are at risk at this stage but a 45-day consultation period with those affected will begin shortly.

The company’s websites attracted more than 41m unique visitors in May and recorded more than 2.5m registrations and, as a result, has set itself a target of achieving 10m registered users by 2022.

It is now planning invest in creating an “improved digital customer experience across all newsbrands and products”, with support from an expanded data and insights team.

A new self-serve digital platform will also be launched to appeal to SME digital advertisers and there are plans for further investment in the In Your Area hyperlocal platform, which has now surpassed 800,000 active registered users.

Reach chief executive 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 National Union of Journalists says it will be “seeking retain as many editorial jobs as possible”.

Michelle Stanistreet, NUJ general secretary, said: “With the company looking to save £35 million by making these cuts and changes, we remain to be convinced that the loss of hundreds of talented journalists will help the stated mission to deliver quality news and content.

“We therefore will be seeking to retain as many editorial jobs as possible as the company embarks on its new strategy of centralising national and regional editorial teams.

“We will be pressing for answers about just how this proposed major structural change can work in practice, for fair treatment for all staff, including casuals and for proper equality impact and risk assessments to be carried out.

“It is welcome that the painful pay cut imposed on staff in April has now been restored.”

Trade union Unite has confirmed print jobs are not impacted by the announcement.

Unite national officer for the media industry Louisa Bull said: “This is just another example of a company that was financially sound before the pandemic being impacted drastically over the last three months.

“Reach is now taking steps to realign the business to safeguard as many jobs as possible. We will be working with Reach during this process and supporting our members in the commercial areas on both the national and regional titles.

“The newspaper sector has been in decline for some time and the tensions between print and digital have only been exacerbated at this time.

“Reach has also confirmed that our members working in the print sites are not impacted by today’s announcement.”

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