MERCURY staff are celebrating what they see as a huge victory in blocking plans to export sub-editing jobs offshore.

Mercury editor Garry Bailey last night told staff that the sub-editing of the newspaper’s news and sport would continue to be done in Hobart, just as it had for almost 170 years.

Mr Bailey told staff in February it was likely Mercury news and sport would be edited in Melbourne by July.

“It’s a win for the Tasmanian community,” staff spokesman John Lawler said. “The Voice of Tasmania will be edited in Tasmania.”

The Media, Entertainment and Arts Alliance said it was a rare victory in a volatile national media scene.

The downside of last night’s announcement is that there will be three or four voluntary redundancies offered to Mercury sub-editors in a reorganisation of the local operation.

After hearing in February about the latest plans to edit the paper offshore, Mercury staff wrote to Mr Bailey requesting he join them in opposing News Ltd plans to export Tassie jobs.

Mr Bailey responded saying he was driving the changes because he believed they were inevitable.

As a result, staff rebelled and mounted a public campaign opposing the plan to edit the Mercury offshore, arguing that it was an attack on the integrity of the paper as the “Voice of Tasmania”.

The campaign won the support of the Tasmanian Government and the Australian Greens, who both wrote to News Ltd chief executive John Hartigan asking that he rethink the plans.

Independent federal member for Denison Andrew Wilkie, Tasmanian Economic Development Minister David O’Byrne, Unions Tasmania boss Kevin Harkins and Hobart City Council alderman Damon Thomas threw their support behind the campaign with strong addresses to a vocal public rally which attracted about 300 to Parliament House lawns last month.

Almost all Mercury editorial staff attended the rally, including the night editor, the letters editor, the chief sub, the chief of staff and most reporters and photographers.

The Mercury staff also wrote to Mr Hartigan suggesting efficiencies could be gained without shipping Tasmanian jobs offshore, and complaining about Mr Bailey’s failure to advise against the export plans.

Mr Bailey, however, last night denied that concern about a public backlash had affected the decision to abandon plans to ship sub-editing offshore.

“The public campaign had absolutely nothing to do with the decision,” Mr Bailey said.

In November last year, Mr Bailey told staff that by mid-2011 work could be sent offshore to Melbourne “starting with publications that are not deadline-critical”.

“However, if an opportunity presents itself for us to send some material to them before then, we will take it,” Mr Bailey said.

A few months later, in February, Mr Bailey told staff: “We are likely to progressively move our daily feature sections to Melbourne first but we have no firm timetable.”

“With news and sport, a likely starting date for having copy subbed in Melbourne is July. However, there is still no firm decision on that,” he said.

Over the past five months, Mr Bailey repeatedly, in writing and verbally, told staff that these changes were inevitable. He told staff that utilising Melbourne sub-editors would improve the quality of the Mercury.

One sports sub-editor, a senior journalist with more than 20 years working for the Mercury and with what many thought was a fine future ahead of him, was so incensed he marched into the editor’s office and volunteered for a redundancy. He was not the only one, as morale hit rock bottom.

A survey presented to Mr Hartigan in Sydney reveals that 100 per cent of Mercury staff surveyed disagreed with Mr Bailey that using an interstate “subbing hub” would improve quality.

The survey also shows that 76 per cent thought they did not have a good future at the Mercury.

A whopping 90 per cent thought staff loyalty was not recognised and 66 per cent said they would not recommend the Mercury to a friend who was looking for a job.

As one staff member wrote: “The Editor should sit down and write a book, ‘How to take a group of committed hard-working staff, who want to do the right thing by their employer, kick them in the guts, make them feel like crap, and pretend all is well’.”

Given the staff’s successful campaign, it appears at least in the short term that the plans to export Tasmanian jobs offshore were not inevitable after all.

The full saga, written by The Fly: HERE

Meanwhile, over at Fairfax:

Staff, union shocked by job losses at Fairfax

  * Lara Sinclair and Amanda Meade
  * From: The Australian

FAIRFAX staff are appalled by a management decision to outsource sub-editing of the group’s metropolitan flagship newspapers, which the union estimates could result in hundreds of job losses.

Chris Warren, federal secretary of the Media, Entertainment and Arts Alliance, said Fairfax Media’s decision to outsource the sub-editing of its news business and sports content to AAP subsidiary Pagemasters, which was announced to staff this morning, was “grossly misguided”. 

“Not only will it impact on the quality of all Fairfax products and compromise the ability of newspapers to quickly respond to breaking events, the contracting out of sub-editing work will diminish the local knowledge so important to the quality of our local newspapers.

“It is estimated that hundreds of jobs could be lost as a result,” Mr Warren said in a statement.

“The Media Alliance is disappointed by the company’s decision to renege on its commitment to quality, independent journalism.

“At a time when Fairfax is looking to invest in the future of quality journalism and the development of market-leading cross-platform news content, taking the specialised skills and expertise of sub editors out of the newsroom is grossly misguided.

“Not only will it impact on the quality of all Fairfax products and compromise the ability of newspapers to quickly respond to breaking events, the contracting out of sub-editing work will diminish the local knowledge so important to the quality of our local newspapers.

“This decision ultimately means less specialised, local and professional journalism from one of Australia’s largest media companies.’‘

The decision is being explained to staff at meetings that began at 11.30 this morning in Sydney and in Melbourne late this afternoon.

An Age staffer said staff were now waiting to see where the axe would fall next.

“Staff are shocked and appalled, especially given the sub-editors haven’t even clocked on yet,” the staff member said.

“Why would they bother coming in to work,” the source said. “Photographers are wondering if they will be next.

“Why not outsource everything to create a non-newspaper?”

“This is most embarrassing for a daily broadsheet.”

Fairfax announced this morning it would outsource sub-editing of the news, business and sports sections of the group’s flagship newspapers to Pagemasters.

…

Fairfax announced this morning it would outsource sub-editing of the news, business and sports sections of the group’s flagship newspapers to Pagemasters.

The move, which appears to affect The Sydney Morning Herald, The Sun-Herald, The Age and The Sunday Age, and The Canberra Times, is one of a number of cost-cutting measures planned for the group’s production processes.

“This is not an unprecedented decision. Pagemasters and other independent production houses now produce many high-quality newspapers around the world,’’ Fairfax chief executive Greg Hywood said in an announcement to staff. Pagemasters already produces some sections of the newspapers.

He said work was also “being finalised on a number of initiatives in other parts of the Metro publishing business’’ that would be “communicated to staff as soon as practicable’‘.

“While the changes I am announcing today carry some pain they represent a necessary step forward in creating a sustainable and successful Fairfax,’’ he said.

“As media companies globally confront the challenge of fragmenting audiences and revenue, decisions have to be taken about how we operate in this new landscape.

“Fairfax is at an inflection point and we must move now.

“The core of the changes I am announcing today are logic-driven its about getting the right balance in our allocation of resources to deliver the necessary outcomes.

“And it involves a substantial reallocation of our resources to writing and reporting.’‘

Mr Hywood said the group would use cost savings to employ more journalists across the group’s metropolitan mastheads.

“We will immediately look to recruit a number of high-quality reporters and writers,’’ he said. “We will expand our trainee programs. We will invest in comprehensive multi-media training and equipment.’‘

Read the full story in The Australian, HERE

The Crikey report:

4. Fairfax slashes: ‘quality journalism’ with hundreds of fewer staff
Crikey senior journalist Andrew Crook writes:

FAIRFAX, GREG HYWOOD

The Age and The Sydney Morning Herald are preparing for a wave of industrial action after new Fairfax CEO Greg Hywood wielded the axe this morning, sacking over 100 production staff to achieve annual cost savings of $15 million under the cover of an announcement spruiking “quality journalism”.

Newsrooms in Melbourne and Sydney were rocked when the horror news came through from Hywood shortly after 10am that sub-editors from Fairfax’s metropolitan titles would be hived off and replaced by Pagemasters contractors across three capital cities.

Fairfax currently outsources much of its sections content to the AAP subsidiary, but news, sport and business has remained in-house to prevent egregious errors and maintain the company’s teetering credibility with readers. Hywood said the redundancies will end up costing $25 million over the next eight weeks.

As Crikey went to print, irate Sydney Morning Herald staff were meeting with Hywood, metro chief Jack Matthews, SMH publisher Peter Fray and editor Amanda Wilson.

One reporter described the showdown as “pretty intense…Amanda was in tears.” A planned net annual saving of $3 million from the Herald editorial budget was a “lame outcome from an operation turning a net profit of $2.2 million a week.”

At The Age, reporters preparing for today’s Victorian state budget lockup were pondering whether they would bother filing any copy at all for the paper, leaving Hywood and Matthews to write and sub the paper themselves. A stop work meeting is planned for 4pm.

“You’d have to expect an almighty shitfight. It’s beyond belief, we didn’t see this coming at all,” said one senior Age editorial staffer.

They foreshadowed an outpouring of vitriol on the steps of Media House: “There is a lot of anger here, and on the newsroom floor there’s talk of a strike.”

Crikey understands The Age currently employs 72 full-time subeditors. Of those, 45 will be given their marching orders with some lucky layout subs apparently avoiding the chop. The Herald and the Sun-Herald will lose 40 subs and gain around 15 reporters, five whom will be senior. There is currently no indication on the number of new hires on The Age.

Last week, at farewell drinks for the SMH’s chief subeditor Tim Vaughan, the legendary figure foreshadowed the move, slamming the company that is about to receive a massive financial windfall from Fairfax as “Pagef-ckers”.

The announcement of the sackings came as the ailing media giant issued a profit warning highlighting continuing soft revenue growth as its share price tanked by 9%.

Fairfax said earnings before interest, tax, depreciation and amortisation (EBITDA) would fall about 6% to $600 million this financial year, down from $639.1 million previously. Second-half revenue was down 4.5% from a year ago, while costs for the period were up 1%.

Subeditors contacted by Crikey were unaware of either announcement, with many yet to clock on for the day’s work. Fairfax blamed the timing on the fact the information was “market sensitive”, however the deal had been worked on for weeks, according to internal Pagemasters emails obtained by Crikey.

“There are clusters of reporters shocked and appalled at the gutless announcement while subs aren’t here,” said senior Age staffer. “Why would subs even bother coming to work? Reporters who liaise with subs for layout and word subbing don’t want to deal with a faceless person in Botswana or Bombay, or wherever they are based.

“How embarrassing for a daily broadsheet. Why not outsource everything and make it a virtual newspaper?”

Media Entertainment and Arts Alliance federal secretary Chris Warren was similarly scathing, noting the decision would lead to the loss of “hundreds” of jobs.

“The Media Alliance is disappointed by the company’s decision to renege on its commitment to quality, independent journalism,” he said. “At a time when Fairfax is looking to invest in the future of quality journalism and the development of market-leading cross-platform news content, taking the specialised skills and expertise of subeditors out of the newsroom is grossly misguided.

“Not only will it impact on the quality of all Fairfax products and compromise the ability of newspapers to quickly respond to breaking events, the contracting out of subediting work will diminish the local knowledge so important to the quality of our local newspapers.

“This decision ultimately means less specialised, local and professional journalism from one of Australia’s largest media companies.”

Hywood buried this morning’s announcement in an email to staff that began with claims he was about to increase the company’s investment in “quality, independent journalism”. He said the changes were “logic-driven”:

“To achieve this we are restructuring the way we produce our newspapers.“New workflow and work practices will be introduced which will not only facilitate the investment in journalism, but will underpin quality…
“As you will be aware, Pagemasters has been successfully producing many of the sections for our metro mastheads for the past three years…

“This is not an unprecedented decision. Pagemasters and other independent production houses now produce many high-quality newspapers around the world.”

In a separate communique, Matthews, the recently appointed tsar of Fairfax’s metro operations, echoed his boss’ sentiments but admitted the “tough choices”, while right from a strategic standpoint, would “have an impact on people currently in the business”.

“We know we cannot simply cut our way to success,” he wrote. “We must focus on a path to sustainable growth that will deliver Fairfax a strong future…” The ex-digital boss said he had recently traveled to the US and UK to observe the carnage cause by a failure to slash and burn before profits plummeted.

Matthews said he had “processes in place” to ensure the paper didn’t turn up with spelling and syntax snafus and that new “outsource centres” would be established in Sydney and Melbourne.

Elsewhere , Hywood made repeated references to a greater investment in writers and journalism at the Sydney Morning Herald, The Sun-Herald, The Age, The Sunday Age and The Canberra Times, stoking suggestions that ex-Telegraph editor and keen scribe Garry Linnell would soon be hired as an expert correspondent. While there was no official specifics on numbers, it seems the neglected Fairfax trainee program will be revived from its current single-digits status.

Hywood, a once-popular former Australian Financial Review editor, said efficiency gains would also be realised from New Zealand operation and through a rationalisation of the company’s printing and distribution operations, presumably in league with News Limited.

Hywood told Crikey this morning he “was in a meeting” and “couldn’t talk” when further details were sought.

The market was also unforthcoming: as Crikey’s deadline approached, Fairfax shares had tumbled by nearly 9%, or 11.5 cents, to $1.19 against a 1% fall in the broader index.

Send your tips to .(JavaScript must be enabled to view this email address) or submit them anonymously here.

5. Beecher: from a burning platform, Fairfax had to take the plunge
Eric Beecher, Crikey publisher, writes:

FAIRFAX, FAIRFAX NEWSPAPERS, GREG HYWOOD, SYDNEY MORNING HERALD, THE AGE

The new leadership at Fairfax Media will attract fierce criticism over the announcement today of a recalibration of its flagship newspapers by sacking all their subeditors. They will be derided because it’s so much easier to criticise people dealing with a giant dilemma than it is to be prescriptive about the dilemma itself.

The reality is that Fairfax is standing on a “burning platform”. This is the metaphor used recently by the CEO of Nokia to describe his own company’s parlous state—about a man working on an oil platform who is awoken by a loud explosion which has set the platform on fire. Faced with the choice of staying on the platform and dying from the fire, or jumping 30 metres into the freezing North Sea, the man jumped. And survived.

Today, Fairfax management didn’t quite jump. But what they have done is to finally acknowledge, after almost a decade of boardroom denial, that the major Fairfax newspapers face a dilemma of survival.

Do they have the right strategy to save The Sydney Morning Herald and The Age from a slow death? No one (including them) knows the answer because the creative destructionism that is lashing newspapers is still unfolding in all sorts of unpredictable ways.

But what Greg Hywood and Jack Matthews have started today, as difficult and unpopular as it is, is the first step in delivering Fairfax a chance of saving its flagship newspapers—it has ended the denial and publicly acknowledged the scale of the problem. As Matthews told staff today:

“The urgency required was reinforced to me during a recent trip to meet publishers and editors in the US and UK. A common theme emerged. These media organisations were too late in recognising the fundamental changes to their businesses. They were too late in taking effective action to address those changes. Now, in fact, it may be too late for some of them to survive ... We will not let that happen to Fairfax. We must act now.”

Maybe they are too late. Maybe they are too optimistic that “quality journalism” will be their commercial salvation.

But after a disgraceful decade of board hubris and denial, at least Fairfax has admitted its platform is burning and it intends to do something about it.

Send your tips to .(JavaScript must be enabled to view this email address) or submit them anonymously here.

• Fairfax’s sub-division won’t save the house

Stephen Bartholomeusz

Published 2:52 PM, 3 May 2011 Last update 9:59 AM, 4 May 2011

  It was an unfortunate coincidence, or perhaps not, that Fairfax Media produced a profit warning even as it unveiled the first plank in the strategy for saving its core metropolitan mastheads.

  The profit downgrade – Fairfax expects earnings before interest, tax, depreciation and amortisation of about $600 million against the $639 million it generated last financial year – probably shouldn’t have come as a shock to the market, although the dive in Fairfax’s share price suggested that it did.

  Advertising markets, particularly display advertising by the embattled retail sector, have been weak and volatile, reflecting the general economic conditions and the fragility of consumer confidence and spending in particular. The spate of natural disasters haven’t helped.

  It is, however, Greg Hywood’s first major operational initiative since becoming chief executive that is of greater longer-term consequence. That the savage rationalisation of the group’s editorial production processes – the planned sacking of most of the sub-editors within the metropolitan mastheads – coincided with the downgrade was perhaps useful. It was both a signal to the market that action is being taken, and to Fairfax’s staff that it was necessary.

  The outsourcing of almost all the sub-editing functions within the metros to AAP’s Pagemasters division is a radical move by Fairfax, even if Pagemasters had been processing some sections of the mastheads for the past three years. It will provide, it appears, the bulk of the $15 million a year savings Fairfax expects next financial year, at an up-front cost in the form of redundancy payments of about $25 million.

  Last month, in a KGB Interview, Hywood outlined his strategy for the Fairfax metros, a strategy that revolves around leveraging their content to generate audiences for the group’s digital transaction businesses. He was committed to investing more in journalism, funding the investment by focusing on printing and distribution costs and, it is now revealed, editorial production.

  While there is a risk to the quality of Fairfax’s published content from outsourcing such an integral part of the editorial process, Fairfax has no choice but to take radical measures to save its key mastheads, whose traditional classified advertising revenues have almost gone and whose print audience is steadily shrinking.

  In a note to Fairfax staff, the chief executive of its metropolitan publishing business, Jack Matthews, referred to a recent trip to the US and UK to meet publishers and editors, where he said a common theme had emerged.

  “These media organisations were too late in recognising the fundamental changes to their businesses. They were too late in taking effective action to address those changes. Now, in fact, it may be too late for some of them to survive. We will not let that happen to Fairfax,” he said.

  Perhaps someone at Fairfax should have taken that same trip five years ago and a different strategy to the one that has been pursued until now – cutting the metros’ costs in line with their falling revenues while diversifying the larger organisation away from them as fast as possible – might have emerged while the metros were in a stronger position.

  Hywood, with his deep journalistic background, at least recognises the centrality of Fairfax’s journalism to the core of the company and its digital future and has a strategy for trying to ensure its survival. Whether it’s the right strategy, or the best strategy, or a belated strategy isn’t as relevant as the fact that he has a strategy other than managing the metros towards oblivion.

  He wants to use the savings generated by the outsourcing of the sub-editing process, or at least some of them, to be re-invested in an expansion of the group’s pool of writers and reporters. He says he will invest ‘’millions of dollars’’ to enhance the group’s ability to deliver ...

Read the rest HERE