The Guardian Media Group has said it expects revenues to be down by £20m over the next six months as it announced new measures to cope with the financial impact of the coronavirus crisis.
The predicted shortfall for the first half of the 2020/21 financial year, which began this month, comes despite a £10m cut in planned spending following a review in March in the early days of the outbreak in Europe.
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GMG, which publishes the Guardian and Observer newspapers, as well as theguardian.com website and apps, said it now faced “significant financial challenges” during the pandemic.
This is despite record levels of traffic and engagement from online readers, and record increases in digital subscriptions and reader contributions. The Guardian’s digital revenues also outstrip those from print.
Furlough and other measures
In new measures taken to keep its short-term costs “under control in a period of great uncertainty”, the group will furlough 100 non-editorial staff in the UK whose workloads have been greatly reduced or stopped.
GMG said furloughed staff would still receive their full salary, as it will top up the Government’s coronavirus job retention scheme which pays out 80 per cent of salaries for furloughed workers.
The furlough scheme currently runs until the end of May, but if it is extended, GMG will also extend its top-up scheme, it said.
Pay rises have also been suspended for at least six months at the group, while managers face a 20 per cent pay cut and board and Scott Trust members a 30 per cent cut for six months.
Staff can also volunteer for reduced working hours with a corresponding wage cut.
In an email to staff today, Guardian editor-in-chief Kath Viner and new chief executive Annette Thomas said the group’s UK advertising business “has been particularly hit by the coronavirus outbreak” and faces “serious challenges in the months ahead”.
As such, commission on advertising sales has been suspended until September this year at the earliest.
Large budget shortfall
It is hoped the measures put in place will save several million pounds, but despite this the Guardian will still face a large budget shortfall.
The group currently relies on owner the Scott Trust’s £1bn endowment fund to make up its cash shortfalls, which allowed it to break even in 2018/19.
Viner and Thomas said in a statement that they will carry out a longer-term review of the business “reflecting the changes sweeping rapidly through the media industry, and through society in general”.
“The Guardian is better placed than many news organisations to weather difficulties thanks to the hard work of the last four years,” they said.
“Even so, it is clear that we will need to adapt, as we always have, in order to serve Guardian readers and meet the challenges and opportunities ahead.”
Picture: Graeme Robertson