Media: They knew the axe would fall. But they didn't expect a bloodbath

If Martin Newland, the editor of The Daily Telegraph, is dreading returning to work tomorrow morning, he would be only human. By yesterday, the letters will have dropped on the doormats of all 520 of his editorial staff confirming in stark black and white the news that they heard before they left work on Friday. They are to face a cull, the like of which has not been seen for some time in national newspapers. Almost one in five of them are to be made redundant.

Whether it is his fault or not, his journalists will have spent the weekend blaming Newland for their plight. As Murdoch MacLennan, the Telegraph Group's tough chief executive, made explicit in his letter: the redundancies "have the complete support of our editors".

Indeed, The Independent on Sunday understands that Newland and Dominic Lawson, the editor of The Sunday Telegraph, were left with the belief that if they rejected the redundancy plan from their new proprietors, David and Frederick Barclay, they too would find their jobs under threat. Somehow, Newland is going to have to explain to his staff how he squares the job cuts with his statement in an interview three months ago that the paper was suffering from "a lack of investment".

The paper is to receive investment - in machinery. Mac-Lennan told staff last week that the paper is to spend pounds 150m on colour presses, "which will be funded in part by a major reshaping operation across the whole of the organisation". The only way to pay for the new kit is by reducing the wage bill, he said. "The number of departures among staff journalists is likely to be in the region of 90," wrote MacLennan. "I am anxious that, unpleasant as any redundancy process may be, it will apply across all departments and be recognised as fair."

In fact, the bloodletting could be far worse once the cost-cutting reaches non-editorial departments. One suggestion is that 300 jobs could go across the Telegraph group, though that figure has not been confirmed.

It is a shattering episode for a newspaper group which has been through the mill ever since financial scandal erupted over its previous owner Conrad Black at the end of 2003. Sale to the Barclays last summer promised renewed stability, but it was not to be. And all the while the paper has been feeling the hot breath of the compact Times.

The company will be inviting applications for voluntary redundancies, although the company expects some of the job losses to be compulsory.

The problem is, admits an insider, that it is often the best staff who ask to leave, knowing that they will have no problems finding work elsewhere.

The plan is for the redundancies to have been made within the month; the management is fully aware that employment legislation allows a 30- day consultation period if fewer than 100 jobs are cut; otherwise the law dictates a three-month period.

The news has been met by staff with fury and dismay; their union representatives were told 48 hours before the letters were posted that the company had "no detailed plans" for redundancies. They - understandably, if naively - took this to mean that the management was not planning redundancies; the paper's owners and managers, meanwhile, claim that technically they did not tell an untruth.

"On Tuesday I was given two assurances," says a furious John Carey, the National Union of Journalists' staff representative. "They said that they had no detailed plans in place for editorial redundancies, and that if any such plan was ever to be developed, the details would be presented to the union before they went ahead. We feel incredibly let down."

Carey convened an emergency union meeting late on Friday to discuss the staff's reaction to the news. The outcome of the angry meeting was unanimous: if the job cuts are not withdrawn by noon tomorrow, the NUJ will organise a strike ballot.

The paper's management is fully aware of the rage it has invoked among staff.

A management insider says the company is bracing itself for a possible strike: "The redundancies will go down pretty badly. I think the union will be furious and say we are a lot of duplicitous bastards. In my view, the `no plan' formulation does not mean there will not be any redundancies, it just means nothing is written down. And nothing was at the time."

And if there is a strike? The Barclays insist that they will tough it out. "We will get the paper out without them. This has to happen," says one of their lieutenants.

Morale at the paper was already low; staff were resentful at having been awarded a below-inflation pay rise. Now, suddenly, "after years vilifying Conrad Black, they may be feeling he was not so bad," says a management insider. One Telegraph writer says that bleak as things are, they could have been worse: "We knew that if Richard Desmond had bought the paper instead of the Barclays, he would have done what he always does and stripped costs right down, getting rid of 30 per cent of the staff without a thought. So in one way, anything less than that is a good thing." But such optimism - heavily qualified as it is - was not shared by many colleagues as the news sank in.

If it cheers up the troops - and it might not, much - the paper is tightening its belt in other areas too. A few weeks ago, the Telegraph, still the grandest national title on the metaphorical Fleet Street, sold off its wine cellar, a fabulous collection of drink worth pounds 750,000. The stash was bought by The Ritz, which happens also to be owned by the Barclay brothers.

The paper is also in the process of offloading an expensive lease on a house in Limehouse, in London's Docklands, which had been used as an overnight base for late-working executives and reporters from out-of-town. ("It would have been cheaper to put them up in The Ritz," sniffs one hack.) And it has decided not to renew a sponsorship arrangement with ITV1's coverage of Formula One racing.

Since October 2003, the month of Newland's appointment, the daily sale of his title, has dropped 35,000. And, despite his attempts to woo young readers, the average age of a Telegraph purchaser - always a worry to advertisers - has bizarrely risen. In 2003, it stood at 55. Last year it went up to 58.

Andy Roberts is a senior executive at Starcom Motive, a media-buying company which buys ad space for some of the biggest companies in Britain, such as Barclays, Honda and Levi jeans.

He says the increasing age profile is a problem for the Telegraph, as are falling sales. "You need people who can hang around for a few years." But the paper is still easily the best-selling quality paper, he says, and he backs the Barclays' and Newland's decision not to shake the paper up too much editorially. Last week, the Telegraph Group began a tour of advertising agencies with a presentation entitled: "Broadsheet is best".

The message was that now that The Independent and The Times have gone compact, and The Guardian is planning to relaunch in a small format later this year, the Telegraph's size is an unchanging, classic value in an insecure world.

Except that that is not necessarily quite the case. Insiders says that nothing has been ruled out forever. The paper has "no plans" to change shape.

As the numbed staff members on the paper's shopfloor will tell you, "no plans" does not mean it will not happen.

FROM BLACK TO WORSE

2004

July: After months of being dragged down by the financial scandal surrounding proprietor Conrad Black, a pounds 665m deal is done which sees the Telegraph Group pass into the ownership of the Barclay brothers. The titles feel they are in safe hands. And they are not Richard Desmond's. Aidan Barclay, the son of Sir David, becomes chairman of the group.

August: The Barclays appoint Murdoch MacLennan as group chief executive. MacLennan, 54, had been group managing director of the Daily Mail group for 10 years. Meanwhile, Desmond reaches agreement with the Barclays over the West Ferry print site in London's Docklands where the Telegraph titles are printed, and in which the Express owner has a 50 per cent stake.

October: John Allwood, head of mobile phone company Orange UK, becomes executive director of the Telegraph group, reporting to MacLennan. He is a former finance director and chief executive of the Mirror Group. His appointment is followed by the departure of the Telegraph group's managing director Hugo Drayton, and finance director Niamh O'Donnell-Keenan.

November: In an interview with the `The Guardian', `The Daily Telegraph' editor Martin Newland says: "We must build on three key strengths - news, business, sport."

December: Speaking to `The Independent on Sunday', the editor of `The Sunday Telegraph', Dominic Lawson, says: "It's not quite clear what sort of resources the group as a whole will have." Meanwhile, the senior appointments have kept coming: Dave King, once of Emap, in charge of advertising, and News International's Katie Vanneck as marketing director.

2005

January/February: Arrival of Lawrie Sear, recently retired managing editor at the `Daily Mail', to work alongside long-time editorial director Kim Fletcher. The move is soon followed by the departure of group executive editor Brenda Haywood - and announcement of raft of redundancies.