As editor exits, can Mirror and owner Reach survive ad crisis?

In the space of a year, Reach, the owner of the Mirror, Express and hundreds of local newspapers, has parted ways with the two most senior members of its editorial leadership team and cut almost 800 roles in the biggest annual cull of jobs in the newspaper industry for decades.

On Monday, Reach confirmed the departure by mutual agreement of Alison Phillips, a 26-year company veteran who was the Daily Mirror’s first female editor since it was founded in 1903, reigniting fears among staff that the pre-Christmas jobs cull will continue this year.

The highly respected Phillips follows in the footsteps of Lloyd Embley, who abruptly departed as group editor-in-chief with immediate effect last summer, shearing one of the UK’s leading national titles of its two most senior and stalwart editorial defenders, as well as plunging the newspaper group further into crisis.

Kevin Maguire, an associate editor at the Mirror, summed up the internal despondency at the newspaper, posting on X that Phillips was the “first editor in my 40 years whose departure will be mourned by the entire newsroom”.

“Everyone is reeling,” said one longtime staffer. “Everyone is saying the same thing. We are done. There is no real faith in the direction and support for the title. There is a lot of despondency. I have been here a long time and I have never seen staff morale so low.”

Meanwhile, the consultation period on 450 job cuts announced last November ended just days earlier. It was the third in less than a year, which staff had hoped might mark a hiatus in a seemingly inexorable series of redundancies at the UK’s largest commercial news publisher.

Reach owns more than 130 newspapers and websites across the UK including the Daily Star, the Daily Record, the Manchester Evening News and the Liverpool Echo.

However, Jim Mullen, the embattled chief executive of Reach, has already refused to rule out the possibility of more cuts and while Phillips’s departure is not part of the voluntary redundancy (VR) programme, many feel that other long-serving staff may go next.

Sources said that after the cuts announcement in November, Phillips tried to intervene to get some applicants to the VR scheme to stay.

“Her attitude was all about the Mirror, she wanted to keep a core together, now she is gone,” said a second source. “If you start going down the newsroom list of senior figures with similar tenure there are other names now doing the rounds who could be earmarked for departure next. Alison and Lloyd were the biggest in terms of who people know, and certainly in terms of cost to the company, but people are now back on edge immediately thinking there is more to come.”

Reach has parachuted in on an interim basis Caroline Waterston, the editor-in-chief for the company’s magazines and supplements, including the celebrity title OK! magazine.

Mullen highlighted Waterston’s “track record leading our magazines through a major digital shift”.

However, insiders are concerned about the increasingly diminished status of the UK’s only left-leaning tabloid. “At a national level, the Labour party and trade union movement are in danger of losing the Mirror, the only left-of-centre newspaper and website aimed at working class readers,” said a third source. “On the right, the Express is perhaps less important than the Mail and Telegraph, but the Conservatives face losing a still important backer.”

Reach’s network of more than 130 national and regional websites have long been criticised by readers for being overloaded with advertising banners and popups, as the publisher struggles to make its digital commercial model work.

Unlike other newspaper publishers that have diversified by building subscription and reader revenue offerings, Reach has stuck solely to digital advertising, in part hampered by owning titles that arguably would not support such initiatives.

Despite digitally being Britain’s biggest newspaper group, and sixth biggest online operation in the UK after Google owner Alphabet, Meta, Amazon, Microsoft and the BBC, the company has said its digital revenues fell £21m last year to £127.8m.

The company blames the big tech firms for deprioritising news in users’ feeds. However, the misfiring digital strategy is in large part responsible for a precipitous slump in Reach’s market value from £1.3bn in mid-2021 to just £220m.

After the latest round of job cuts, overall employee numbers will fall to about 3,500 – 36% fewer than in 2016 – with its regional newspaper publishing operation stretched to breaking point.

“I think many shareholders are pinning their hopes on a sale,” said a fourth source. “MPs and political parties are going to have to think about how they get their message out. If they want to save local journalism, they need to act now and think about an alternative to Reach’s ownership of their local media.”

Reach, which has said it needs to cut operating costs by up to a further 6% this year, said it still made a £95m profit in 2023.

Alex DeGroote, a media and tech analyst, said: “Revenues are not showing much sign of a pickup, so the inference would be that cost-cutting is ongoing. You can tell how serious it is when you are having to let the editor of your flagship title go, it’s symbolic.

“It looks to be shareholders first and foremost, editorial output second and readers are probably below that. Sooner or later Reach is going to run out of road in terms of cost savings and will have to look to put its assets together with another player.”