Carolyn McCall, the chief executive of Guardian Media Group, told staff at The Observer that the newspaper's closure was a realistic option for the company as it tries to drastically cut costs, Media Republic reported Tuesday.

The Times revealed details of McCall's staff memo, in which she wrote that all options for The Observer were being considered. McCall told staff the company is "examining every aspect of... publishing strategy and titles" and that "a wide variety of different options, approaches and scenarios is being developed and will be considered."

The Sunday Times revealed on Sunday that the Scott Trust Group, the owners of the Guardian Media Group, began discussing the closure of the Observer in early July.

The memo described the Guardian Media Group as in a time of "structural change" and in preparing for ongoing slumps in advertising was looking to reduce the size of the company.

The Sunday report by the Times suggested that the group is also considering converting the newspaper into a magazine to be published on Thursdays. An alternative plan suggested by the Telegraph was a drastically slimmed down version of the paper's current Sunday edition.

"This is what has leaked, and resulted in headlines about the future of The Observer. Those of you who have worked here for a while will be familiar with intermittent coverage of this nature over the years," McCall wrote to staff.

The paper's circulation sits at 409,970 copies, a 6.36 percent decline on last year.

According to the Telegraph, The Observer's future should be decided at a Scott Trust meeting next month.