Nine Entertainment to lay off hundreds of employees in response to economic challenges

Nine Entertainment, one of Australia’s leading media conglomerates, announced plans to cut up to 200 jobs across its operations, citing economic challenges and a sluggish advertising market as primary drivers for the decision. 

This significant restructuring move is aimed at finding $30 million in savings and ensuring the company can continue to invest in digital growth opportunities amidst a turbulent economic landscape.

A substantial portion of the job cuts will affect Nine’s publishing division, which includes prominent newspapers such as The Age, The Sydney Morning Herald, and The Australian Financial Review. Despite contributing 25% of Nine’s earnings, this division is expected to lose up to 90 positions. 

In fiscal 2023, the publishing division accounted for 21% of the company's revenue. Tory Maguire, Nine’s publishing head, emphasized the need for efficiency and prudent decision-making to sustain growth in subscription areas. 

“We will be focused on finding efficiencies where we can, and making prudent decisions so we can continue to invest in growth areas that are driving subs. We are looking at reducing the publishing division headcount by between 70 and 90 staff over coming months,” Maguire stated.

The news and current affairs broadcast team will also see significant reductions, with 38 jobs slated to be cut. This sector has faced a decline in influence as advertisers shift their spending away from traditional free-to-air mediums.

In an email to staff, Nine’s CEO Mike Sneesby explained that the cuts were necessary due to weak advertising revenues and the impending end of a commercial agreement with Meta, the parent company of Facebook and Instagram. 

This deal has provided significant financial support to Nine and other media companies over the past three years. “In order for us to be able to keep investing in digital growth opportunities across Nine, we must continue to responsibly manage costs through the cycle,” Sneesby noted. He acknowledged the tough nature of these decisions and the uncertainty they would bring for affected employees.

Nine’s announcement follows similar cost-cutting measures by other major Australian media companies. Seven West Media and News Corp have also made substantial staff reductions in response to the challenging advertising environment. Seven West Media recently announced plans to make 150 employees redundant, while News Corp has cut around 80 positions in its sales division, with further editorial cuts expected.

Since Nine’s merger with Fairfax Media in 2019, the company’s revenue streams have shifted significantly. The merger brought together broadcast television, newspaper publishing, radio, digital, and streaming video on demand (Stan) platforms. 

However, the dominance of the broadcast division has waned as advertisers diversify their expenditure. In 2019, broadcast accounted for 66% of Nine’s revenue, but this figure has since dropped to 47.7% in the first half of the 2024 financial year. Conversely, Stan has increased its revenue contribution from 8.5% in 2019 to a more significant portion of Nine’s earnings.

Sneesby has been vocal about the impact of Meta’s refusal to negotiate a second commercial deal with publishers under the news media bargaining code. Speaking at a parliamentary inquiry into social media companies in Australia, he attributed part of Nine’s financial strain to Meta’s exit from the code, which is expected to remove around $70 million of funding annually for publishers.

The announcement of job cuts adds to a period of upheaval for Nine. The company has been dealing with the aftermath of former news and current affairs director Darren Wick's departure and the resignation of chairman Peter Costello, who stepped down following a controversial incident involving a reporter. Catherine West has since been appointed as the new deputy chair.

As Nine navigates these economic headwinds, the focus will be on streamlining operations while maintaining the quality and integrity of its content. The company aims to adapt to the changing media landscape by continuing to invest in digital platforms and technologies that promise future growth.

Despite the challenges, Sneesby expressed confidence in Nine’s ability to weather the storm and emerge stronger. "From our nationwide team of almost 5000 people, around 200 jobs are expected to be affected across Nine including some vacant and casual roles not being filled,” he said, highlighting the broader strategic vision to manage costs and invest in future opportunities.

The planned job cuts at Nine Entertainment reflect broader trends in the media industry, where companies are increasingly seeking to balance cost management with the need for digital innovation. 

As Nine restructures its operations, it will need to carefully navigate the challenges posed by economic conditions, shifting revenue streams, and the evolving demands of the digital age. For the employees and stakeholders of Nine, the coming months will be a period of adjustment and adaptation, with the hope that these changes will position the company for long-term success in a competitive media landscape.