Australian media giant Fairfax said Monday it will slash 1,900 jobs and erect paywalls on its flagship titles in a major overhaul towards a digital future as print advertising revenues plunge.
As part of the plan, the Sydney Morning Herald and The Age in Melbourne will shift from broadsheet format to a more compact, tabloid size and two printing facilities will be shut.
Chief executive Greg Hywood called it a landmark event for the Herald, which began publishing in 1831, and The Age, founded in 1854.
"No one should be in any doubt that we are operating in very challenging times," he said.
"Readers' behaviours have changed and will not change back. As a result, we are taking decisive actions to fundamentally change the way we do business."
Fairfax, which has newspaper, radio and digital interests, is the main rival in Australia to News Limited, Rupert Murdoch's Australian empire which is also suffering and reportedly preparing for large job cuts.
Like media companies worldwide, Fairfax has faced sliding print advertising and circulation revenues and reported a 44 percent plunge in first-half net profit to December 31.
Stock in the company has fallen more than 85 percent in the past five years and management has come under pressure from the world's richest woman and key shareholder Gina Rinehart to do something about it.
Monday's announcement saw shares rally nearly eight percent to 65 Australian cents by early afternoon.
Fairfax said it will introduce subscriptions for its Sydney Morning Herald and The Age websites in early 2013, similar to News Limited, which already charges for access to its main title, The Australian.
Print versions of those two mastheads will shrink to the size of its Australian Financial Review newspaper from March 4, 2013.
The job cuts will come over three years and together with the closure of printing facilities in Sydney and Melbourne will result in annual savings of Aus$235 million (US$238 million) from June 2014, the company said.
One-off costs associated with the changes will be around Aus$248 million.
The Herald said Hywood had told staff that 20 percent of job losses would be from editorial, setting the scene for possible industrial action.
Last month, staff called a snap 36-hour strike after company moves to shift editorial production of several regional newspapers to New Zealand, with the loss of 66 jobs.
The Media, Entertainment and Arts Alliance union said it was seeking urgent meetings with the company.
"At no time did the company reveal its new plans for targeted cost that will bite even more savagely into the company with the loss of 1,900 jobs," it said.
Communications Minister Stephen Conroy called the job losses "terrible".
"1,900 job losses is terrible for any sector, no matter whether it's over one year or over three or four years," he said.
"Fairfax have had to make, they say, some very tough decisions to survive as an organisation at all."
Hywood said the changes had come after "considering the merits of a full range of structural alternatives, including a demerger".
"The package of strategic initiatives is bold, and several are difficult, particularly as they will impact on some of our people," he said.
"However, we believe that they are in the best interests of Fairfax, our shareholders, and ultimately the majority of our people."