Rupert Murdoch looks to cut losses at News International's magazine unit

News International, the publisher of The Times and The News of the World, is closing its loss-making magazine unit in a move that marks James Murdoch's first attempt to put his stamp on the business since he took the job as European head of the group's parent company in December.

The Chelsea-based News Magazines, which was set up in 2005 and publishes three titles, lost almost £10m last year, its second consecutive year of poor performance. But although News International is "disengaging" from the magazine business, it does not plan to close down the individual titles.

The group is looking for buyers for the Love It! real-life weekly, which has a circulation of nearly 370,000 copies per issue, down about 10 per cent from last year. There are already a number of offers under consideration, according to sources close to the company.

The fate of SkyMag, which is the UK's biggest magazine by circulation and goes out to more than 7.5 million Sky television customers every week, is yet to be decided. It could either be brought back in-house and published by News International itself, or be contracted out to a specialist publisher. The Sunday Times Travel Magazine, the other publication in the stable, with a circulation of more than 47,000, will be brought back in-house.

The first hint of things to come was the abandonment of a long-awaited women's weekly in January before it got off the ground, followed by the closure of the division's monthly interiors magazine less than a year after its £6m launch.

Plans for the unit's 80 staff, who found out about the changes this week, are yet to be finalised and the company is entering a period of consultation. Redundancies have not been ruled out and question marks hang over the futures of more senior staff including Judy McGuire, the editorial director, Sandy Whetton, the managing director, and Simon Hills, the commercial director. Camilla Rhodes, the chief executive, whose prospects are also uncertain, is married to Clive Milner, News International group managing director and Mr Murdoch's number two.

James Murdoch is widely viewed as the heir presumptive to Rupert, his media tycoon father, and his elevation to his current role has done nothing to detract from the impression. Mr Murdoch Jnr took the position in December after three years running BSkyB, the satellite television group that is 39 per cent owned by News International. When he was first appointed in 2004, analysts and industry watchers cried nepotism but, after an abrupt call for shareholders to judge him on his results, Mr Murdoch went on to receive many plaudits. He is commonly credited with the company's meeting an ambitious target of 10 million subscribers, as well as investments in new technology such as the Sky Plus recording system, and the group's broadband success.

News International, the UK division of News Corporation, controls nearly half the domestic newspaper industry.