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Australian Fairfax Newspaper Group Cuts 1,900 Jobs, Gina Rinehart Increases Stake In Firm

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FAIRFAX MEDIA
The group, which owns the Sydney Morning Herald, is cutting 10% of its staff over the next three years | AP

One of Australia's most prominent newspaper groups, Fairfax Media, has announced it will cut 1,900 jobs as it attempts to adapt itself to the future landscape of journalism.

The job losses will see 10% of the company's total 20,000 staff go over the next three years. Around 20% of the jobs cut will be editorial roles and two of the group's printing plants will also be closed.

The news was swiftly followed by a move from mining magnate Gina Rinehart to increase her stake in the company through a share raid, which saw her share in the company rise from 12.5% to 18.7%.

Rinehart, the world's richest woman, is believed to be pushing for multiple spots on the media group's board, and the multibillionaire's new share purchases will greatly increase her influence over the publisher.

Announcing the move, the company's chief executive, Greg Hywood, emphasised the media group's strategy for the future, which will see two of its major papers, the Sydney Morning Herald and the Melbourne Age, move from broadsheet-sized papers to tabloid, and see a pay wall added for both titles in 2013.

"No one should be in any doubt that we are operating in very challenging times," Hywood said.

"Readers' behaviours have changed and will not change back. As a result we are taking decisive action to fundamentally change the way we do business."

The government's communications minister, Stephen Conroy, added that the losses were regrettable for Fairfax but that they represented a worldwide move towards online publishing.

"The Internet will continue its march and sectors that were profitable previously are going to struggle as the Internet cannibalises different parts of the economy. It's not something that you can stop, it is not something you can turn back," Conroy said.

Fairfax is one of the oldest and most prestigious newspaper groups in the country. The publisher owns 400 major and regional newspapers, as well as radio stations and websites.

It has been reported that the changes to the staff, including redundancy packages, will incur costs of nearly A$248m, but lead to savings of A$235m by 2015.

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