The Independent has put more than a fifth of its staff at risk of redundancy as a decline in the digital ad market and wider worsening economic conditions forces the online-only publisher to seek to cut costs.
The publisher has put 52 roles at risk of redundancy in the UK – 30 of which are in editorial positions – out of about 240 employees.
The need to cost cut is understood to have been driven by the decline in the digital advertising market – which has also affected Facebook and Instagram owner Meta and seen Google-owned YouTube record its first ever decline in revenues – as well as a change in Facebook’s algorithm affecting content that appears in users’ news feeds implemented earlier this year.
The Independent, which recorded a fifth consecutive year of profitability in 2021, said that despite investment and growth in areas including its online TV service, e-commerce activity and expansion into the US, it now needs to cut costs.
“We are in the midst of an extremely challenging economic climate, with financial headwinds affecting the entire industry,” said Zach Leonard and Christian Broughton, the chief executive and managing director of the Independent respectively, in an email to staff on Wednesday.
“Considering these adverse conditions, the board has had to review the resources of our business, and in doing so, it is proposed that, subject to consultation, operating costs will be reduced, and certain roles in the business will be closed.”
The cuts come despite the Independent, where Russian-British businessman Evgeny Lebedev is a shareholder, crediting its investment in journalism for doubling profits last year from £2.7m to £5.48m.
“[This was] as a result of continued investment in the editorial teams in the UK and US, as well as an expansion of its network of foreign correspondents located around the globe,” the company said in its annual accounts for the year ended 3 October 2021, filed at Companies House earlier this year.
Leonard and Broughton said affected staff members have been briefed on the plans and “all available new roles will be discussed with them as a matter of priority, before anything is advertised externally”.
The company said that if appropriate new roles cannot be found redundancies will be made, with a consultation due to begin to “explore ways of avoiding or reducing the number of redundancies”.
The Independent, which shut its print editions in 2016 while at the same time starting to ramp up its US presence to build its digital-only offering, reported a 36% increase in revenues year-on-year from £30m to £41m in 2021.
UK revenues rose 57% from £15m to £23.5m, the US and Canada rose 29% from £7.6m to £9.9m, while income from other territories grew 90% from £5.2m to £9.9m.
At the filing of the annual financial report in February, Leonard struck an upbeat tone saying that its latest financial year had started well and that the group “continued to deliver strong audience and revenue performance in line with its business plan”.
However, since the worsening economic condition have led the publisher to look to cut its £24m annual cost base in 2021, up from £19m in 2020.
“It is by taking hard decisions to confront challenges and embrace change that we can keep our business strong, continue to make opportunities available, and fund more innovative, independent, award-winning journalism for many years to come,” said Leonard and Broughton.
In July, the Evening Standard, where Lebedev also has a shareholding, reported a loss of £14m for last year as the Covid pandemic continued to dent advertising income and commuters remained at home, taking the London freesheet’s losses to almost £70m in the past five years.
