ON JANUARY 15th the Guardian showed off its new, trimmer look, shifting from its idiosyncratic “Berliner” format to a tabloid shape with a redesigned logo in sober black type. But the more dramatic makeover is of the financial books of Guardian Media Group (GMG), publisher of the Sunday Observer and the daily Guardian, which may find its news operation in the black next financial year. A newspaper business that two years ago was beset with existentially worrying losses appears on the verge of breaking even.

The turnaround is partly due to steep cost-cutting, which is a dog-bites-man story in journalism. But the Guardian would manage the feat while still giving away news free online, and that is a story worth telling.

In January 2016 David Pemsel, the new chief executive of GMG, and Katharine Viner, the new editor-in-chief of the Guardian, informed staff that GMG’s endowment fund, meant to ensure the financial security of the paper in perpetuity, had lost £100m ($140m) in just half a year, taking it to £740m. Mr Pemsel was advised by industry peers to trim costs and put online news behind a paywall. He and Ms Viner cut costs by 20%, or more than £50m. Alan Rusbridger, Ms Viner’s predecessor, had led the newspaper to global relevance with a large online readership. But he spent profligately. In two years GMG has reduced its headcount by 400, to about 1,500.

Yet unlike a growing number of newspapers, the Guardian has not put up a paywall. Instead it has pursued a membership model, asking online readers to contribute whatever they like. About 600,000 now do, with recurring payments or one-off amounts. American readers tend to choose the latter option, Ms Viner says (Donald Trump’s inauguration was a big day for donations). GMG says the total figure amounts to tens of millions of pounds per year. Ms Viner says revenue from readers (including 200,000 print subscribers) now exceeds revenue from advertisers.

The result is steadily declining operating losses: from £57m two years ago to £38m last financial year and, Mr Pemsel says, less than £25m in the year that ends on April 1st. He predicts breaking even next year. Ditching its own printing presses and going tabloid will help, saving several million pounds a year. The Guardian may now physically resemble more of its peers, but its turnaround story remains idiosyncratic.

Correction (January 19th, 2018): A previous version of this article put the Guardian’s operating losses at £69m two years ago and £45m last year. This has been changed to £57m and £38m respectively, to reflect losses made by the newspaper rather than those of GMG, its parent company.