The managing director of Guardian News & Media, Tim Brooks, has told staff that more cost savings at the publisher of the Guardian and Observer are on the way.
Brooks told staff in a memo posted on the company intranet yesterday that the current rate of losses at GNM, which publishes the two national newspapers and the theguardian.com website network, which includes MediaGuardian.co.uk, was "unsustainable".
He said that GNM needed to "operate at a sustainable level, without compromising our core purpose". He told staff that the company was doing well in a difficult environment but that its revenues were under pressure.
Brooks added that GNM was losing £100,000 a day, a rate that its parent company, Guardian Media Group "cannot afford".
"We are looking at everything – literally everything – that we do, to see how we can economise, and we will do whatever we can to keep the impact on staff to a minimum. However, because the biggest portion of our costs is people's salaries, we have to review staffing levels," he said.
In July Guardian Media Group has posted a pre-tax loss of £89.8m for the year to 29 March, with GNM reporting an operating loss of £36.8m.
The price of the weekday Guardian increased by 10p last week to £1 to combat the pressures on revenues, Brooks added.
He said GNM staff would be informed about the outcome of the company's comprehensive review "as soon as we are in a position to give you clarity".
"In the meantime, it is important everyone digests the current position, and the nature of the challenges facing GNM. Overcoming these challenges will require our collective efforts, and as ever I welcome any thoughts or suggestions you may have," Brooks added.
"This is an unsettling and testing time for everybody, but the fact remains that we are – contrary to some reports by our competitors – very well placed compared to many of our peers. Like all media companies (and many others in the wider economy) we have to make hard choices, but we have a range of advantages our competitors do not, and provided we take the necessary steps, we can be confident about our future. We will get through these difficult times; our unique brand of journalism will survive and flourish."
Yesterday GMG addressed speculation over the future of GNM's Sunday title, saying in a statement that it was "not accurate" to describe its operational review of its national newspapers as a "plan to shut the Observer".
Also yesterday, the Daily Telegraph quoted "senior sources" saying that the closure of the Observer looked "unlikely".
The paper speculated that full integration of journalists working on the Guardian and the Observer would be the outcome of the review and that there could be job losses. The Observer has its own team of news journalists and editorial staff that put together its review, business and other sections, and magazines including Observer Food Monthly.
It was reported last month that GMG was weighing up options for the future of the Observer, including possible closure.
GNM is already looking to reduce its costs by making £20m in savings across its commercial and editorial operations.
As part of these existing measures GNM has been looking to cut 50 out of 850 staff journalists by the end of the year through voluntary redundancies to help reduce editorial costs by £10m.
GNM's commercial departments are shedding 82 jobs out of about 840 as part of moves to save a further £10m in this area, while 27 posts are going at the Guardian Print Centre in London.
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