DMGT to cut jobs in £50m cost cutting exercise

The Daily Mail and General Trust (DMGT), owner of the Daily Mail and Mail Online has announced that the company is looking to cut costs by £50 million in a strategic review of its business operations.

The cost-cutting exercise which will include a reduction in headcount is part of a process designed to “create a greater focus in the DMGT portfolio”.

Alongside the Mail brands, the DMGT portfolio also includes Euromoney, DMG Events and The Metro freemium title.

In a trading update, DMGT stated: “Given the challenging market conditions facing certain businesses within the portfolio, reorganisation initiatives are being implemented to protect their profitability,” the company said in a trading update on Thursday.

“These initiatives will create a greater strategic focus and enable more effective decision-making across the group, with the aim of generating future benefits and opportunities for long-term growth.”

Despite a surge in circulation and advertising follow Brexit, the uplift seemed to be short-lived.

Tom Singlehurst, an analyst at Citibank, told journalists: “Following a positive surprise on advertising trends at the [third quarter] stage, advertising appears to have deteriorated again in the final weeks of the year.”

DMGT has seen online advertising revenues grow by 18% to £13m over the 11 month period to the end of August. However this has been offset by a 13% or £20m fall in the print business.

Some media pundits are suggesting that DMGT’s legacy businesses are causing a problem for the group.

David Reynolds, a city analyst at the global investment banking firm Jefferies, suggested in a note to investors: “Split the group in two: DMG B2B and DMG Media.”

Reynolds continued: “DMG Media, still a thorny problem, almost feels as if the legacy journalistic approach for the Daily Mail hampers Mail Online.”