Staff at the Sydney Morning Herald and The Age in Melbourne have voted to walk off the job for a week following Fairfax Media's announcement that it will cut 125 editorial jobs — roughly a quarter of its newsroom — as part of a $30 million restructure.

Key points: As well as cutting editorial jobs, Fairfax will cap rates for freelance contributors and casuals

As well as cutting editorial jobs, Fairfax will cap rates for freelance contributors and casuals MEAA "appalled" by decision, saying cuts to editorial are bad for business

MEAA "appalled" by decision, saying cuts to editorial are bad for business The federal budget will fall during the strike period

It means staff will not cover the federal budget, which will be handed down on Tuesday.

Journalists from Fairfax Media's news website in Queensland, Brisbane Times, have voted to also strike for seven days in support of their colleagues, while those working at the Newcastle Herald and Perth website WA Today will stop work overnight.

Staff at newspaper The Illawarra Mercury and website The Canberra Times will not strike, but have made a statement of solidarity.

The Mercury journalists said they would "not complete work that is usually performed by journalists at other mastheads during this time".

Fairfax staff were informed of the job cuts this morning by email and in a meeting with editorial director Sean Aylmer.

They have been given a deadline of next Tuesday, May 9, to nominate for a voluntary redundancy.

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Sydney Morning Herald state political reporter Sean Nicholls told media "the future of Fairfax newspapers is existentially at risk".

"This threatens the very existence of our newspapers, let alone the very quality of our newspapers," he said.

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"The one-week strike action should be a huge wake-up to this company on what's at stake."

He said it was significant that the strike period would potentially affect federal budget coverage.

"We thought long and hard about whether to do that and decided on this course of action because it should drive it home to people, and I hope it does, that think about the coverage of a federal budget without the balance and objectivity that Fairfax provides every single year and has done for decades — that is what is at stake," he said.

Nicholls slammed Fairfax Media management, saying the scale of the cuts was "unprecedented in Fairfax history".

"We're looking at 125 journalists' jobs — that's one in four of every Fairfax metropolitan newspaper in Australia," he said.

"That is shocking and we condemn management who have tried to cut their way to quality, which is absolutely impossible, and the fact that they have failed again to try and find an alternative solution.

"… a media landscape in Sydney and Melbourne where the only commercial media outlet you can turn to is a Murdoch media outlet, a virtual monopoly, that is an appalling situation and threatens the very pillars of democracy."

Sean Nicholls, flanked by colleagues, criticised Fairfax management over what he said was a "shocking" decision. ( ABC News: Nicole Chettle )

This afternoon, Fairfax Media issued a statement in response to the strikes, saying it would continue to publish "as usual".

"We are disappointed in the decision by some of our masthead journalists to take unprotected industrial action for seven days after a month-long consultation period about necessary changes in our Metro Media business. But it is not the first time we have had industrial action," a spokesperson said.

"As in the previous episodes, we will continue to publish across print and digital as usual."

Managements signals change in editorial focus

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In his email to staff, Mr Aylmer said all editorial sections could be affected by the cuts.

"While we will be looking across all parts of the newsroom, at the end of the redundancy program we expect there will be significantly fewer editorial management, video, presentation and section-writer roles," Mr Aylmer said.

Fairfax will also cap rates offered to freelance contributors and slash payments to casuals, aimed at cutting $3 million from the budget.

Mr Aylmer also signalled a change in editorial focus with the key mastheads — The Sydney Morning Herald, The Age, Brisbane Times and WA Today — publishing fewer state-based stories.

The decision drew a furious response from the journalists union, the Media, Entertainment and Arts Alliance (MEAA).

MEAA chief executive Paul Murphy said the union was appalled by the decision.

"The decision indicates that, yet again, Fairfax is opting for savage cuts that will only weaken its business further rather than investing in its products and working to achieve smarter outcomes," Mr Murphy said

"None of the other parts of the Fairfax business are worth anything without the journalism and yet it is the journalism that Fairfax always cuts.

"This will only undermine and damage its mastheads further, alienating its audience and leaving the editorial staff remaining to have to work harder and harder to fill the gaps."

Traditional media business rapidly eroding

Staff at The Age protest the job cuts. ( AAP: Joe Castro )

Fairfax has seen its traditional media business rapidly eroded as advertising revenues are increasingly sucked up by global digital giants such as Google and Facebook.

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Fairfax announced a massive full-year loss in 2016, after writing down the value of its mastheads and plant by $1 billion.

The loss also included more than $60 million for a round of at least 120 redundancies made during the year.

Big broker Morgan Stanley found by early last year Google and Facebook were taking around 40 per cent of Australia's total $14 billion advertising budget, a percentage that was growing rapidly in an advertising pool that was basically flat-lining.

On the other hand, newspapers' advertising revenues had slumped from around $4 billion to little more than $1 billion over the past decade, and were forecast to decline by around 9 per cent a year, through to 2020.

Fairfax NZ merger plans scuttled

Fairfax received more bad news this morning with the New Zealand competition regulators knocking back the planned merger with New Zealand's biggest media player NZME, publisher of the New Zealand Herald.

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NZ Commerce Commission (NZCC) chairman Mark Berry said a merger of the country's two largest newspaper groups would not benefit the public even if it could expand the lifespan of some newspapers through significant cost savings.

"This merger would concentrate media ownership and influence to an unprecedented extent for a well-established modern liberal democracy," Dr Berry said.

"The news audience reach that the applicants have provide the merged entity with the scope to control a large share of the news consumed by a majority of New Zealanders.

"This level of influence over the news and political agenda by a single media organisation creates a risk of causing harm to New Zealand's democracy and to the New Zealand public."

Fairfax chief executive Greg Hywood attacked the NZCC, saying the regulator "had failed New Zealand" and indicated more jobs would be lost.

Fairfax shares slipped 1 per cent on early trade to $1.07 cents per share.