Fairfax defends cuts, threatens to fire striking journalists

In a statement to the market, Fairfax boss Greg Hywood said the company would continue to publish while its journalists were on strike. The company has also threatened to fire journalists who are taking part in the wildcat strike, write Sally Whyte and Emily Watkins

While Fairfax staff have walked off the job, the struggling media company has revealed to the share market that overall revenues are down 6% on last year and defended the decision to make 125 editorial positions redundant. In an investor update in Sydney this morning, CEO Greg Hywood said the company was committed to getting the print and digital editions of the mastheads out during the strike period.

“This is not the first time we have faced industrial opposition to what we are doing — we won’t be dissuaded from making the right decisions,” he said in commentary released to the ASX said.

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

Despite maintaining that the publishing businesses have remained profitable even without the help of Domain’s revenue, Hywood said a “reset, reduced and simplified cost structure” was necessary for the future of publishing.

While publishing costs have been reduced by more than $400 million over the past five years, the company has told staff it has to cut $30 million more. Hywood also signalled that cuts in “technology, back office and support” functions were still to come.

Investors were greeted at the event by striking Fairfax staff, who handed out a letter defending the company’s journalism and reminding investors that it is the respected journalism that brings in advertising revenue.

Hywood spoke to the future of Fairfax “post-Domain separation”, saying that the company would be “much the same, with a smaller yet more valuable holding in Domain”. He referred to the publishing parts of the business as “increasingly sustainable”. The company also committed to publishing daily newspapers as “the best commercial decision”.

Fairfax won’t comment on whether it will head to the Fair Work Commission to force journalists back to work in order to cover next week’s federal budget. It had been speculated that the company would go to the commission, even though it did not do so for unprotected strike action taken last year.

The company has threatened striking workers that they could lose their jobs as a result of the action. In an email to all staff from editorial director Sean Aylmer and managing director Chris Janz, the company said it would dock workers’ pay for the strike period:

“The company may consider taking disciplinary action against those employees who participate in any unlawful industrial action, which may include termination of employment. In this regard, there is no distinction between participating in unlawful industrial action and simply not attending for work without a proper reason. We consider both examples to be an unauthorised absence, damaging to your mastheads and a breach of your legal duties to the company.”

Aylmer yesterday announced that 125 jobs would be cut — a quarter of editorial staff — as part of $30 million worth of savings in an attempt to keep the struggling company afloat.

After stop-work meetings, journalists at The Age, The Sydney Morning Herald and The Australian Financial Review voted to strike for a week, walking out of newsrooms in Melbourne, Sydney and the Canberra press gallery yesterday afternoon. Fairfax colleagues at the Brisbane Times and WA Today, which will also be affected by the cuts, also walked out yesterday afternoon, as did staff for one day at the Newcastle Herald, which is part of the Fairfax regional division. Journalists at the Canberra Times, also in the regional division, voted to “work to rule” — not fill any editorial gaps left by the strike.

In a resolution, staff rejected the cuts, voted not to accept any forced redundancies, asked management to take a 25% pay cut, and asked for voluntary rounds to be open for at least three weeks (Fairfax wanted all requests for voluntary redundancy submitted within a week).

Staff in Melbourne, Canberra, Brisbane and Perth had walked out before Fairfax’s staff briefings planned for those cities.

The Media, Entertainment and Arts Alliance (MEAA), the journalists’ union, said the cuts would “dramatically reduce [the newspapers’] reporting of significant areas of Australian life”.

“The editorial staff are really angry. They think the company has made a terrible decision that is not in the best interests of the company, its audience or its staff,” MEAA boss Paul Murphy said.

Fairfax said yesterday that production would continue as usual for both print and digital:

“We are disappointed in the decision by some of our masthead journalists to take unprotected industrial action for seven days after a month-long consultation period about necessary changes in our metro media business. But it is not the first time we have had industrial action. As in the previous episodes, we will continue to publish across print and digital as usual.”

After the walk-out, the Herald published news of the strike written by wire service AAP.

Yesterday morning, Alymer sent the announcement staff have been waiting for since they were told last month the company needed to find $30 million in savings in order to keep the business running. In it, he announced a management restructure, as well as some changed roles, a review of all contributors’ contracts, cuts to casual staff and a review of all third-party contracts.

According to MEAA, Fairfax lost almost 800 editorial staff between 2011 and 2016. Staff last went on strike in March last year for three days over a plan to cut 120 jobs. In 2014, journalists and photographers went on strike for 24 hours to protest against cuts to photographers.