United News & Media, owner of Express Newspapers, is to make 220 staff redundant by the end of the year.
City analysts are speculating the redundancies are in longer term preparation for a sale of the ailing national newspaper group.
They believe Express Newspapers is in preliminary negotiations with Carlton Commun- ications about a sale, which would follow changes in cross-media ownership regulations. A management buyout is also believed to be in preparation. Heinz chairman Tony O’Reilly has been connected with the newspaper group.
Express Newspapers managing director Andrew Cameron says the cuts represent 15 per cent of the company’s workforce and will cost the company 7.7m in redundancy payments.
He claims there is no plan to sell titles. Cameron puts the redundancies down to paper price increases and price wars.
“The newspaper price war has affected the sale of all titles. But the greatest effect has been in inhibiting a price increase over an extended period, when raw material costs have been increasing,” he says.
Agency press buyers believe Daily Express readers have been pulled both upwards to The Times and downwards to The Sun during the price war.
Staff received letters at home yesterday (Tuesday) saying that the cuts would be made across all departments.
However, it is thought that support services and the administration department are likely bear the brunt of the losses.
The redundancies come in a bad week for the Express. The Daily Express and Sunday Express’ circulations fell to all-time lows in the June ABCs.
The Sunday Express’ 1,366,832 circulation is down 8.7 per cent on June 1994. The Daily Express’ circulation of 1,257,751 represents a 6.6 per cent decline on June 1994. The Daily Star’s circulation has fallen by 1.6 per cent over the same period.