Guardian journalists plot to thwart plan to sell The Observe

The newspaper’s full financial report, usually published in the summer, has not yet been released.

But cherry-picked figures revealed the company burned through £37m last year, investing heavily in the US and a new European edition. This happened even as revenues fell 2.5% to £257.8m.

The Guardian’s international expansion – particularly in the US and Australia – is paying off, as is its strategy of asking for donations and encouraging readers to buy a monthly subscription for £15.

Total digital reader revenue rose by 8% last year to £88.2m, with more than half of that coming from outside the UK.

But those gains are dwarfed by big expenses as The Guardian continues to expand domestically. The company employed 1,014 journalists in 2023, up from 860 in 2019, while staff costs rose by more than £30m over the same period.

To cut costs, Ms Viner announced a voluntary redundancy programme in May, under which a number of high-profile journalists left the paper.

Bosses hope the measures will help save 4% to 5% of costs, but critics say they will do little to balance the budget.

Instead, insiders accuse bosses of relying too much on the Scott Trust to cover losses. In 2021, Annette Thomas resigned as chief executive of Guardian Media Group after just over a year, following disputes with Ms Viner over how the company’s finances were managed.

The constant cycle of hiring and firing

Employees talk about a constant cycle of hiring and firing rather than focusing on sustainable growth.

One source describes it as “feast or famine every six months”, although he downplays the Guardian’s financial problems as a form of “elegant poverty”. The source adds: “It’s like having a big old mansion but not being able to afford to get rid of the damp.”

The newspaper’s bosses say there is no room for complacency. In a letter this week, Ole Jacob Sunde, chairman of the Scott Trust, warned that the trust “is not there to fill gaps in annual operating budgets”, adding: “We continue to demand that The Guardian is a sustainable business on its own terms – and we need to be honest about the areas of the business that are not part of our future growth and adapt.”

There are now signs that management may be taking a tougher stance. Further cost-cutting is expected, with the risk of further job losses. If the sale of The Observer goes through, it will also raise questions about how long The Guardian will keep its print newspaper.

In the near future, such moves will only exacerbate tensions with the union at a difficult time for workers. The NUJ has demanded an urgent meeting with bosses to discuss the proposed sale – a move that could increase the risk of strike action.

Executives will be painfully aware of the damaging effects of a staff revolt after concerns expressed by Telegraph journalists played a significant role in torpedoing a planned takeover of RedBird IMI by a UAE-based fund.

As one Guardian employee put it: “The voluntary redundancies and the sale of The Observer are, I think, proof of how bad things are.”