Chisholm, left, has been replaced as managing director by Penman
Business a.m., Scotland’s business and political daily, which celebrated the first anniversary of its launch with confidence only last month, now faces redundancies and budget cutbacks.
The reports it has been making in its pages on recession-struck firms have come home to roost.
Its parent company, Bonnier of Sweden, has been hit hard by the global economic downturn, particularly in its dailies and business press divisions. Its evening newspaper group has just made a third of its workforce, 200 out of 600, redundant and is making a £10m budget cut.
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In Edinburgh, Business a.m. managing director Jim Chisholm has already left and been replaced by editor John Penman, who will hold a dual role. Chisholm has been offered a strategic projects role with Bonnier.
"The situation for Bonnier is looking tough," said Penman. Last week, he and Hasse Olsson, chairman of Bonnier’s business press division, broke the news to journalists at the Torpichen Street office and explained what the implications would be for them. Penman later saw small groups of journalists to warn them of painful times ahead.
"We tried to be as open and honest as possible. Since then, the mood has been very difficult.
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"There is a lot of uncertainty and people are very worried. It’s hard to offer blanket reassurance."
Business a.m. has been absorbing the initial £15m invested in it for the first five years at too fast a rate and Bonnier is to limit further investment.
But the company has approved investment of £8m, of which the newspaper will be able to draw down a half over the next year.
Penman has begun the process of going through the budget to see where cuts can be made. "I can’t speculate on the result. I think we’ll get through it but it is going to be very painful," he said.
"The key thing is to try to protect what we do – how we create editorial and how we sell the paper. I can’t rule out redundancies but we operate a very tight ship and there’s no fat to trim."
He does not foresee economic conditions improving for another 18 months – "so we have got to come up with a budget that will get us through that period and on-target to break even in 2003".
The finance director and all department heads are working with him on the new strategy.
Accountants Deloitte Touche have just made an independent audit of Business a.m.’s sales and put them at 11,500. The figure is below the title’s yearly target of 15,000.
"But we have had tremendous support for our editorial quality and no one has cancelled their subscription," said Penman.
By Jean Morgan
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