Guardian News and Media has put construction of a huge events venue in King’s Cross on hold as it seeks to bring losses down to a sustainable level.
Plans to convert the Midlands Good Shed into a 30,000 square feet cultural centre were announced in September 2014 as the flagship of the Guardian Membership scheme.
Membership has been promoted by The Guardian as an alternative to online subscriptions. Instead of paying for content, readers are invited to pay £15 a month for priority booking and discounts to attend Guardian events.
In October, GNM chief executive David Pemsel said in a memo to staff that cost cuts were needed because of “an incredibly challenging market” and what he said was one of “the most difficult trading periods we've faced in many years”.
A GNM spokesperson said today: “Soon after being appointed, David Pemsel and Katharine Viner ?spoke to staff ?about the intensely challenging advertising trends affecting the whole media industry, and launched a strategic review of GMG's business as a consequence.
“?In the context of that wider review?, we took the decision back in December last year to pause the building works while we look at the current plans for the Midland Goods Shed and assess the business case?. That process is ongoing and we continue to review all our options."
Insiders believe that voluntary redundancies for journalists are on the cards.
The number of editorial staff has ballooned since February 2013 when 58 took voluntary redundancy and the total was said to stand at around 600.
In March 2014 there were said to be 968 “core editorial staff” who had the right to vote in the staff ballot for who would succeed Alan Rusbridger as editor. While the two figures are not directly comparable (because the ‘core editorial staff’ figure is said to include some freelances and casuals) – there has nonetheless been a big increase in total Guardian editorial staff driven largely by expansion in Australia and the US.
Guardian News and Media currently has cash reserves of £840m which it plans to use to provide investment income sufficient to sustain The Guardian’s losses indefinitely. In the year to the end of March 2015 GNM reported a loss of £19.1m on turnover of £214.6m.
In October Pemsel warned that these reserves are "finite and modest by some standards".
The Telegraph reports today that GNM is currently heading for an annual loss of more than £40m. Press Gazette understands that insiders believe this year's projected losses could be as high as £70m.
The Guardian still makes most of its money from the print edition, although it has been budgeting for digital to overtake print for the first time this year.
In November, print sales of The Guardian fell 7 per cent year on year to 165,672 per day and The Observer fell 6.2 per cent to 189,383.
In the same month average unique browsers (different devices) visiting The Guardian website grew by 54 per cent to 9.3m per day.
In September 2014 Jonathan Robinson, the founding director of the proposed new Guardian event space, wrote: “We are transforming the Midland Goods Shed into an open amphitheater for festivals, acoustic gigs and debate, as well as including an intimate restaurant with a changing programme of chefs in residence, an armchair cinema, a 3D printing and fabrication lab, a rooftop garden, galleries and a dozen atmospheric spaces hosting events in everything from photojournalism to ceramics, from breaking news to works of fiction.”