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Fears of more  job losses  at Fairfax
Fears of more job losses at Fairfax

More editorial job losses at Fairfax are feared after the troubled media company announced 66 local jobs will be outsourced to New Zealand.

Fairfax Media will move sub-editing work from its regional newspapers, the Newcastle Herald and the Illawarra Mercury, to Fairfax Editorial Services in New Zealand.

It comes as the media company undertakes a review to reshape its business while its share price languishes under the weight of a weak advertising market and major structural changes in the media sector.

Fairfax has also denied rumours it could drop the weekday editions of its flagship mastheads The Sydney Morning Herald and The Age in favour of online versions.

But in announcing the regional cuts on Tuesday, the company said no reporting or photographic positions would be affected.

Media analyst Peter Cox said outsourcing would make Fairfax just a commissioner of stories and he expects further job losses.

"As revenue keeps disappearing out the door, as the circulation keeps falling, the income keeps falling and the advertising market's very sick, they're going to keep on reducing people," Mr Cox said.

"If you're a newspaper organisation and you can't do your own subbing, do you really then have a reason for existence?"

He also questioned whether the move was a way to try to break the unions.

"They can obviously do it cheaper with the New Zealanders and they're up three hours earlier to do the subbing so that might be a help to them."

Any move to cut weekday mastheads would hit at the core values of the organisation and the digital audience would not necessarily grow as a result, he said.

Mr Cox said leadership was at the heart of the problem.

"The performance of the chairman (Roger Corbett), let's face it, has been absolutely miserable for the last five years."

Fairfax says it is still speaking to affected employees about the new plans which would impact upon its Fairfax Regional Media division.

It says the changes would position the company to better take advantage of opportunities within digital media.

In 2011, some sub-editing at The Sydney Morning Herald, The Sun-Herald, The Age and The Sunday Age was moved to Pagemasters, a subsidiary of Australian Associated Press.

Fairfax and News Limited are major AAP stakeholders.

Fusion Strategy managing director Steve Allen said Fairfax and rival News Limited would continue to cut their staff.

"They just can't afford the same level of staffing because they can't make the same margins they used to," he said.

While offshore editorial staff did not understand the nuances of local markets, editorial outsourcing had been adopted elsewhere, he said.

"It's not a big issue in our view."

Citigroup recently issued a research note saying things would get "tougher" before getting better for Fairfax.

Fairfax shares were 0.5 cents lower at 66.5 cents at 10.30am.