The Guardian announces cost reduction plans in attempt to reach breakeven point
“Against the backdrop of a volatile market, we are taking immediate action to boost revenues and reduce our cost-base in order to safeguard Guardian journalism in perpetuity” – Guardian Media Group chief executive David Pemsel
The editor-in-chief of Guardian News & Media, Katharine Viner, today announced that the newspaper company would be cutting costs 20 percent in an effort to reach breakeven by 2018/19.
“Over the next three years, a growing and far deeper set of relationships with our audience will result in a reimagining of our journalism, a sustainable business model and a newly-focused digital organization that reflects our independence and our mission,” Viner said.
The Guardian has been very publicly against the concept of newspapers launching paywalls, so it is in a bit of a bind when it comes to trying to grow reader revenue. Today they said they would continue to focus on their membership model, relaunching “an enhanced membership offer.”
The newspaper’s revenues have been growing, up 10 percent over the past five years. But this growth has been the result of the Guardian’s moves into the US and Australian markets. As a result, annual operating costs have increased 23 percent to £268 million over the same period of time.
“Against the backdrop of a volatile market, we are taking immediate action to boost revenues and reduce our cost-base in order to safeguard Guardian journalism in perpetuity,” said Guardian Media Group chief executive David Pemsel “This plan will ensure our business is increasingly adaptable and better able to respond quickly to the pace of change in the digital world.”
The Guardian also announced today that it has invested in Founders Factory, a company that funds technology startups. Under the investment deal, Guardian Media Group becomes the exclusive partner for Founders Factory investments in businesses in the media sector.
“This strategic investment gives GMG the opportunity to bring emerging technology trends into our own business and culture, giving us access to a global network of start-ups and the chance to get in early with possible commercial opportunities,” said Pemsel.