The Fairfax job cuts saga: lessons for SMEs


In case you missed it: There’s been turmoil in the news industry over the last week with Fairfax Media announcing its latest round of journalist job cuts in what it’s calling a “major company restructure” to help it face the future. That future includes the ever-increasing impact of technology on traditional media organisations.

Not surprisingly, news of the 125 job losses sparked a backlash from journalists and their union along with a flood of public comment, not helped by the fact that media outlets are usually really bad at handling their own publicity. After all, a newspaper getting rid of journalists to help profitability sounds like a hospital getting rid of patients so it runs more efficiently.

Fairfax also isn’t getting any joy from its media competitors being only too eager to jump on the story and cover it from every angle.

While this is a case of ongoing job shedding on a large scale, the reality is that a business of any size risks having to reinvent itself to survive in an economic squeeze, including cutting staff positions.

Any business owner could also be thrust into the public spotlight because of a negative issue, particularly if it involves job losses. We are all operating in a reputation economy, where people take more notice of what others say about us than what we actually do. In such an environment, an issue can quickly whip out of control.

How can a business – whether it’s Fairfax or a smaller operation – stem the tide when there’s a public backlash over a company decision? In the before-Facebook era, businesses could perhaps get away with a “decide and tell approach”; that is they could make decisions behind closed doors and choose whether to tell the rest of the world. Some organisations try to operate as if that’s still the case, but those days are well and truly past.

Today, people can see deeply into your business. So much information about your operation is already online; you probably haven’t put it there and you might not even know it exists, but others can easily find it. Your customers, suppliers, and everyone else associated with your business can freely comment in public forums.

Your staff also have direct access to the world through their social media channels and even if they’re supportive, loyalties may be challenged if their own positions are at risk. Fairfax hasn’t been helped by the fact that those set to lose their jobs are professional writers who know how to convey their message effectively.

While you can’t stem the tide, you can act to minimise the fallout.

  1. Plant seeds early. Surprises make social media fodder, so as soon as you suspect that changes are likely, bring everyone in your business on the journey with you rather than excluding them. I’m not suggesting you make early announcements of job cuts if decisions haven’t been made; however you could start talking about new directions, the fact that conditions have changed and you need to become more efficient. Set the scene so everyone understands the challenge.
  2. Get on the front foot. When there’s negative news about your business, be the one to tell it yourself. Use all your channels; your website, social media or traditional platforms to convey your own messages. That includes talking directly with all of your key stakeholders; anyone who can impact or be impacted by your business. This will be a race against time as word travels in a flash, but do your best to get to people early. Try to be the source of truth rather than allowing your critics or those affected to have control of the message.
  3. Be transparent. “Spin” or slick talking doesn’t cut it. Fairfax’s comment about keeping its print publications afloat as long as people want them rings hollow when the company is cutting the jobs of the people writing those publications. Be sincere in your statements and take negative comment on the chin.
  4. Remember the human toll. If it’s a case of having to lose staff, never forget that these are humans facing the impact of a decision that’s outside their control. When I was a manager at a large government agency, I once had to manage a restructure involving retrenchments. For a time I lost sight of the human cost of such a decision. When I witnessed one long-serving employee’s emotional meltdown I was dramatically reminded of the shortcomings of my own communication with that person. I learned that, regardless of how difficult the conversation, every employee deserves direct and honest face-to face-communication about decisions that directly affect their job situation.
  5. Be great at what you do, but don’t put all your eggs in one basket. Times get tough in all industries. One medium-size business I’m working with has just experienced this, having to cut jobs because of a significant downturn in its highly specialised sector. Smaller businesses need broad options when it comes to their markets, so be on the lookout for other areas you could move into if your core sectors take a hit. Circumstances can change quickly. In Fairfax’s case, the market changes were long in coming and some could argue they should have been foreseen and prompted earlier action. Regardless of the speed of change, do what you can to stay on top of developments that may impact your business.

No business operator wants to end up in a situation like Fairfax and we must be vigilant and responsive to change. The steps we take today will determine whether we survive or nose-dive during economic downturn, and whether we emerge with our business reputation intact.


About the author

Dr Neryl East is a highly qualified and experienced expert on media, communication, credibility and reputation. She has had an extensive career in journalism, corporate, crisis and governance communications over the past 30 years, working for Win TV, Wollogong City Council and Shellharbour City Council. Neryl works with leaders and teams who want to stand out, accelerate their success and avoid costly reputation mistakes. She has a Master of Arts and PhD in Journalism, and her book The Headline Edge hit number one on Amazon in three countries. Neryl is also a Certified Speaking Professional – an international designation awarded to only a small percentage of professional speakers globally.