Barclay brothers planning 'major surgery' at Telegraph

The Barclay brothers, the new owners of The Daily Telegraph, The Sunday Telegraph and The Spectator, are planning "major surgery" that could result in the loss of more than 100 jobs.

The pair, who also own The Scotsman, bought the titles, which employ 1,200 people, for £665m last week. Unions and management favoured their bid over the rival offer from private equity group 3i, led by David Montgomery, a former Mirror Group chief executive and notorious cost cutter.

But the brothers are expected to employ similar methods to those used at The Scotsman to make savings at their new titles. A source said: "They cannot justify paying £665m without some major surgery in the medium term. Editorially and commercially, it has to be improved."

The Scotsman lost £3m in 1995, the year the Barclays bought it. The group is expected to report an operating profit of around £8m on a turnover of £60m this year, despite the declining newspaper market in Scotland.

Under the Barclays, its back office functions have been outsourced, staffing levels reduced and closer collaboration between The Scotsman and the Barclays' other titles encouraged.

No decisions have been made about management or editorial changes. The Barclays are understood to have told Andrew Neil, the editor in chief of their newspapers, that they want him to have a role. Mr Neil has told friends he would be tempted if offered the chief executive job.

Lord Black of Crossharbour, who theoretically controls the Telegraph parent company Hollinger International, is understood to be threatening to block the sale if the company does not drop its $1.2bn (£700m) lawsuit against him. Lawyers for Hollinger International are studying whether they can prevent Lord Black from receiving his share of the proceeds from the sale.