FAIRFAX Media Ltd, Australia's second-biggest newspaper publisher, will eliminate about 5 percent of its work force in a bid to shave A$50 million (US$43 million) in annual costs.

Fairfax will book a A$50-million charge as a result of the 550 job cuts, it said yesterday in an Australian stock exchange statement.

The reductions will begin in the final half of 2008, and a third of the losses will be in editorial, according to the company.

Chief Executive Officer David Kirk's spent more than US$3 billion on newspapers and radio stations since Australia relaxed media ownership laws two years ago, seeking to offset declining sales at dailies in the country's biggest cities.

As a result, Fairfax's work force swelled 46 percent in the fiscal year ended June 2007, while sales per employee fell 24 percent, according to data compiled by Bloomberg News.

"It's an appropriate reaction to an environment that's become more challenging as revenue growth slows," said Angus Gluskie, who helps oversee US$500 million at White Fund Management in Sydney and owns Fairfax shares. "I've been pleased with management's approach over the last couple of years, and I'm comfortable with their direction today."