London | The publisher of The Guardian and The Observer newspapers says it remains committed to its Australian operations after announcing plans to cut costs by 20 per cent amid a sharp decline in print advertising revenue. 
Guardian Media Group (GMG) announced the cost-cutting drive on Monday in response to a 25 per cent drop in print advertising revenues and lower than expected growth in online ad revenue that is likely to produce an operating loss of Â£53 million ($106.6 million) for the year ending   March 31.
"Against the backdrop of a volatile market, we are taking immediate action to boost revenues and reduce our cost-base in order to safeguard Guardian journalism in perpetuity," GMG chief executive David Pemsel said. A 20 per cent decline in GMG's annual cost base amounts to about Â£54 million and the company has not ruled out job losses.
The left-leaning Guardian operates one of the world's most popular news websites and has been involved in some of the big stories of recent years including the Edward Snowden revelation of widespread surveillance by the US National Security Agency and the phone-hacking scandal at now defunct News Corporation tabloid, News of the World.
However, the publication continues to spend more than it earns. The parent company's main source of income - a cash and investment fund boosted by the sale of assets including its stake in Trader Media Group in 2014 - now holds Â£735 million compared with Â£838 million last   July.
An aggressive expansion into the Australia and US online news markets has not been cheap. The Guardian reports a third of the 479 new editorial and commercial staff employed in the past three years were in these two countries. The Guardian's chief rival in Australia, Fairfax Media (publisher of The Australian Financial Review and The Sydney Morning Herald), has been cutting staff over the same period while News Corp has also reduced headcount.
The future of The Guardian's Australian operation have been the subject of some speculation. However a GMG spokesman said: "Guardian Australia is a vital part of The Guardian's global presence and voice and is firmly on track with its five-year plan to build a financially sustainable business. We are very pleased with its performance."
The Guardian commands large online audiences but big brands pay less to advertise online than they would in a newspaper, and pay even less again to advertise on mobile sites, where many people now access news. Ad blocking has also curbed the profitability of digital news platforms. Costs have risen 23 per cent in five years at GMG, which employs 1960 staff, while revenues have dropped by 10 per cent.
GMG said it planned to generate greater revenue with a relaunched membership scheme, align its editorial and commercial operations and make greater use of data to spot trends.
"Over the next three years, a growing and far deeper set of relationships with our audience will result in a reimagining of our journalism, a sustainable business model and a newly-focused digital organisation that reflects our independence and our mission," said editor in chief Katharine Viner.
Key points
Guardian Media's print advertising revenues have fallen 25 per cent.
Costs have risen 23 per cent in five years while revenues have dropped by 10 per cent.