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Fairfax to outsource jobs

Broadcast: 04/05/2011

Reporter: Brendan Trembath

One of the oldest publishers of newspapers in Australia is outsourcing work to cut costs, but some
say the move will compromise the quality of the product.


LEIGH SALES, PRESENTER: Industrial action's looming at one of Australia's oldest publishers after
extensive cost cutting. Fairfax Media is sacking its sub-editors, the journalists who write
headlines and spot spelling mistakes, poor grammar and factual errors. The work's to be outscored
instead. Opponents of the move claim it's one more step in the death in a newspaper empire, but
Fairfax management says cost cutting's a matter of survival. Brendan Trembath reports.

PRESENTER (archive footage): Since 1841, with very few reverses, John Fairfax & Sons has grown and

BRENDAN TREMBATH, REPORTER: It's Australia's most venerable media organisation, with nearly 200
years of history behind it.

Once famed for its rivers of gold classified advertising, modern technology has changed the
newspaper industry and Fairfax Media forever.

ALAN KNIGHT, JOURNALISM, UTS: Newspapers used to be known as the daily miracle because they were
wonderful products of the mechanical age. They were marvellous productions, but they were difficult
to produce and that production may not be relevant to the 21st Century.

ERIC BEECHER, FORMER EDITOR, SMH: The challenges are quite simple. The advertisers are deserting
newspapers for other media, particularly the internet. Younger readers are buying and reading fewer
newspapers than their parents, and this amazing new medium, the internet, which is revolutionising
the whole media industry, is hitting newspapers harder than any other medium.

BRENDAN TREMBATH: In recent years, Fairfax has tried to reinvent itself, developing online sites
and moving back into radio. Early this year, Greg Hywood became its new CEO.

GREG HYWOOD, CEO, FAIRFAX MEDIA (April 25): What we're gonna be doing is investing in journalism.
Journalism has never been more important to these metro newspapers.

BRENDAN TREMBATH: But in the first big move since taking the top job, Greg Hywood has stunned staff
by announcing big cuts in what some see as a sign of desperation. About 45 sub-editors on the
Sydney Morning Herald and 45 on The Age.

LIAM PHELAN, SUB-EDITOR: Every job is under question, there's no certainties in there anymore. It's
obviously a very difficult decision for everyone and a lot of people are very upset about this.

CHRIS WARREN, MEDIA ALLIANCE: Well this would be one of the biggest job losses in the company in
its history, and that's saying something because there's been many rounds of redundancies here over
the past decade.

BRENDAN TREMBATH: Fairfax will send the sub-editing work to an outside company. Pagemasters began
in Australia and has now expanded to New Zealand and the United Kingdom.

ERIC BEECHER: What a lot of newspapers are trying to do is reinvent themselves, which is to say not
just simply cutting their costs, which is what's behind the decision of Fairfax to cut their
sub-editors this week, but to actually reinvent their entire raison d'etre to look at where they
fit in the media mix.

BRENDAN TREMBATH: In a statement to staff yesterday, the Fairfax CEO said, "We must do things
differently if we are to deliver on our commitment to the highest standard of quality independent

But others worry about seeding control of the editorial process.

ALAN KNIGHT: The sub-editors are the heart, the minds, and most importantly, the memory of news
organisations. It's their collective knowledge and intelligence which guards the quality of the

LIAM PHELAN: Sub-editors write headlines, cut copy to fit, work on captions. We also do things like
identify legal issues and rewrite copy where it's necessary. We work with reporters and editors and
the graphics people.

BRENDAN TREMBATH: Pagemasters has already been editing some sections of Fairfax papers, such as
Good Living, Drive and Domain. Fairfax Media says it is outsourcing sub-editing to reduce costs.
Initially it will pay an estimated $25 million in redundancies. But Fairfax says there'll be
savings in the longer term, about $15 million each business year.

Former Age editor Andrew Jaspan believes Fairfax didn't have much choice.

ANDREW JASPAN, FORMER EDITOR, THE AGE: You really need to look at your costs, you need to see if
you can do it more efficiently. There are lots of newspapers around the world, including the Daily
Telegraph and the New Zealand Herald papers who outsource their production to Pagemasters.

BRENDAN TREMBATH: Most newspapers are struggling, as advertisers abandon them. The weaker papers
could end up as yesterday's news.

ERIC BEECHER: In 10 years' time, we'll probably see fewer newspapers; a lot of them will be more
like niche papers. But I think there will still be some mass market newspapers, particularly in
cities like Adelaide and Brisbane and Perth and Hobart where they are monopoly cities already and
they need one newspaper.

BRENDAN TREMBATH: The Age and the Sydney Morning Herald are flagging, but they're still well-known,
well-loved and well-read.

ANDREW JASPAN: They command huge audiences and we've gotta stop thinking about the audience in
terms of a newspaper audience or online audience. If you combine those two together, they're
actually still talking to around a million people a day.

LEIGH SALES: Brendan Trembath reporting.