The freesheets Zurnal and Zurnal24 will no longer have regional editions and each will be published in a single edition for the entire Slovenia, although the papers will maintain some regionally-based content.

Novkovic said in a press release that the cost-cutting measures were necessary for the future of the publisher that needs to adapt to the difficult economic conditions, "which is a challenge for the entire business sector and media market".

The financial operations of Zurnal Media can only be assessed after 2013, when the five-year investment phase at Zurnal ends, he added.

Novkovic said the cost-cutting and measures to boost financial efficiency were needed because business results for the past year show the company is still lagging behind its goal of becoming a profitable company and securing a future for the papers.

The owner, Austrian media corporation Styria Media International, wants the company to break even by 2013. By that year the investment phase will have completed in line with initial plans.

Last year Zurnal Media generated a loss of EUR 5.8m, which would amount to EUR 4.8m this year without restructuring measures, although revenues are estimated to increase by 5-10% to EUR 8.5m.

The figures are the reason for restructuring that brings changes for products, distribution and staff numbers and organisation.

As part of restructuring at the sales department four to five staff were made redundant around the New Year. Novkovic said the main goal of making the department more efficient had already yielded results.

Deputy editor-in-chief Matej Kosir said that the costs for temps would be reduced by around 30%. After the lay-offs the company will keep around 60 full-time employees and some temps.

The affected reporters are shocked as they did not expect to be laid off. Some of the temps will receive one more salary as reward for their work, while the employees who agreed to the termination of their contracts will receive another four to five salaries.

The Slovenian Journalists' Association (DNS) expressed concern at what it said was just a part of the worst-case scenario in journalism coming true, a development that would mainly harm citizens.

Media companies are not hiring any more, relying on badly paid journalists without basic employment security, which makes them even more exposed to pressure from the owners or other, the DNS said in a written response.

Similarly, media expert Marko Milosavljevic told the STA that the developments at Zurnal meant nothing good for the media scene in Slovenia.

Milosavljevic, who lectures at the Ljubljana Faculty of Social Sciences, pinpointed the structure of the Slovenian advertising pie as one of the reasons for the failure of the freesheets.

"The fact that television in Slovenia controls over 70 percent of the advertising pie places us at the very bottom in the EU when it comes to other media," he said, adding that this showed lack of progress in society.

All other countries have more developed reading culture, and better conditions for other media such as newspapers, magazines, radio stations, and the internet, the expert said.

He called for systemic measures to deal with the problem, arguing that some companies had gained an abnormally powerful market position thanks to lack of action by the regulators.

He moreover does not see why Zurnal would have incurred such loss in the first few years when it came out as a weekly and why the supervisors and owners had not reacted more appropriately at the time.

Zurnal came out in November 2003 as the first free weekly in Slovenia and was followed by its daily edition Zurnal24 and news portal Zurnal24.si in September 2007.

Zurnal Media is 100% owned by Styria Media Group, which has invested EUR 32.7m in the company in Slovenia.

According to web portal pozareport.si, Zurnal Media has accumulated a loss of EUR 26m since launching operations.

Styria Media Group also holds stakes in newspaper publisher Dnevnik, magazine publisher Adria Media Ljubljana and shopping website bolha.com., the 5th most visited Slovenian web site, followed by zurnal24.si..

Zurnal24 was published today for the first time after a five-week summer break.