Guardian Media Group (GMG) will shed more than 100 jobs in the coming months as the loss-making Guardian and Observer newspapers seek to trim losses that ballooned to £61 million last year.

Cutbacks will affect about one in ten of the 1,700 people in the editorial and commercial departments of the left-of-centre newspapers, as its owner seeks to ensure their long-term survival.

Carolyn McCall, chief executive of GMG, told staff that losses at the newspapers were “not sustainable at their current levels” but added that “if we do the right things now” the two titles and their journalism “will continue to enjoy both security and stability”.

The group refused to rule out the possibility of compulsory redundancies at a group known for its heavily unionised workforce. However, the company will continue to seek volunteers in a programme that has seen 70 journalists and 80 commercial staff leave.

Alan Rusbridger, Editor of The Guardian, said that “nine out of ten people will still be here at the end of the review”, but also confirmed that his newspaper would close its Thursday technology supplement to save money. Since April, revenues at the The Guardian and The Observer have fallen by £33 million.

On Tuesday a £2 million package of cuts were also announced for The Observer. The Sunday title will close three of its four monthly magazines, and its standalone business and travel sections will merge into other parts of the newspaper.

GMG is owned by The Scott Trust, which has existed since 1936 to “secure the financial and editorial independence of The Guardian in perpetuity”.

Ms McCall said that Auto Trader, the car trading website that GMG owns jointly with Apax Partners, the private equity firm, earned £55 million in operating profit in the first half of the year. Emap, the professional publisher in which it has a 29.5 per cent stake, earned £40 million in the period.

However, Guardian Media Group receives no dividend income from either business, its principal drivers of profit, because the cash generated is being used to pay down debt. That means there is no cash available to support losses at The Guardian, forcing the group to make cost savings at the newspapers.

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