Independent Newspapers is planning to generate cost savings of more than £90 million over the next five years in a major restructuring which will see it cut its worldwide workforce of 13,500 by around 10 per cent.

Independent is to go ahead with a plan to build a state-of-the-art printing plant on the outskirts of Dublin which will be operational within the next two years.

Independent chief executive, Mr Liam Healy, would not elaborate on the employment details of the restructuring, but sources close to the company said that the newspaper operations in New Zealand and South Africa would bear a large portion of the cuts, although the Irish national newspaper operations in Dublin would also be the focus of stringent cost savings. Union sources within Independent have indicated that they expected the four-day week enjoyed by journalists and print workers in Middle Abbey Street to be one of the targets in the management restructuring.

However, Mr Healy insisted that the decision to build a new print facility was not conditional on five-day working in Middle Abbey Street being achieved.

Deputy managing director, Mr Gavin O'Reilly, said: "We met the unions two weeks ago and we laid out our stall in terms of the increased competition from The Irish Times, Ireland on Sunday and the UK entrants to the market. The competition is bigger and better now than it has ever been and a little bit of reality at some stage has to enter the fray."

Union sources said Mr O'Reilly gave a clear indication that substantial changes in working practices would be required at Middle Abbey Street, with severe cuts proposed in editorial budgets. The recent appointment of Mr Michael Roche as managing editor in Middle Abbey Street, with specific responsibility for budgets, is seen as a first step by Independent towards cutting costs in the editorial area.

In a statement, the National Union of Journalists said it would be seeking immediate clarification of Independent's restructuring plans and the employment implications and expressed concern "at any threat to jobs in such a major player in the newspaper industry in Ireland".

The union said that in a memorandum to staff, Independent had referred to "Best International Practice" (BIP) as the basis for future development of the group. NUJ Irish Organiser, Mr Seamas Dooley, said: "The concept of BIP is rooted in an industry where trade unions have been derecognised . . . the NUJ in Ireland sees no reason why a company whose international success is based on the achievements of Irish workers should look abroad for an effective model of industrial relations."

Union sources said changes to existing working practices would be strongly resisted, but conceded that many who currently enjoyed a four-day week might be willing to change to a nine-day fortnight if the compensation package were big enough.

It is understood that Independent will aim sharply to reduce its editorial costs by reducing the numbers of casual and freelance staff.

The decision to go ahead with a new print plant was greeted with some surprise by union sources as Independent had indicated only two weeks ago to the unions that a new plant would only be built if the group got agreement on cost cuts in Middle Abbey Street.

The planned capital expenditure will be over and above the £38.5 million cost of the restructuring which will be taken as a charge in Independent's 1998 accounts. This exceptional charge, however, will not affect earnings as it is already covered on the profits from the £60 million sale of its French outdoor advertising group, Sirocco.

Mr O'Reilly said Independent had looked at sites and plant for the new facility, but that no contracts had been signed. He added, however, that it would be modelled on the plant installed within the past year at the group's New Zealand Herald title. "It will be in an area with good distribution," he said, indicating that the plant will probably be built somewhere close to the M50 motorway.

He declined to give the cost of the new plant, but industry sources said that given the number of newspapers printed each week by Independent, it could be in excess of £70 million.

The statement that the restructuring will be earnings-enhancing gave Independent shares a much needed boost and the prospect of earnings upgrades was the main reason behind a 20p rise in the share price to 240p.