Fairfax’s struggling Sydney radio station 2UE is in disarray as it seeks to ditch its hard-right strategy by promoting moderate presenters and integrating its operations with The Sydney Morning Herald next year.

Insiders say morale — already low after a dire 2012 ratings performance — is through the floor at year’s end thanks to uncertainty about next year’s schedule. One staffer described the station, currently without a permanent programming director, as a “basket case”; another said it was a “shemozzle”.

“There are 10 to 12 producers who don’t know what they’ll be doing next year,” one 2UE insider said. “There are no rosters I’m aware of beyond New Year’s Day.”

Breakfast host Jason Morrison is embroiled in a legal stoush with 2UE’s managers, who want to move the conservative firebrand to the lower-profile drive-time slot. Crikey understands former Australian Idol judge Ian “Dicko” Dickson is management’s pick to host the key slot alongside a female presenter. Ex-Channel Ten Breakfast host Kathryn Robinson is seen as a likely sparring partner.

Morrison is resisting the move on the basis his contract specifies he was hired to host the breakfast slot and he’s said to be furious.

In other developments, Crikey understands One Nation founder David Oldfield, who hosted the evening slot, has cleaned out his desk and will not be back on the station in 2013.

2UE will also broadcast two shows from inside a custom-built studio in the SMH newsroom. The mornings shift, as already announced, will be hosted by current drive-time presenter Paul Murray. Crikey understands this will be followed by a business-themed hour-long broadcast, also from the SMH newsroom, with weekends host John Stanley.

A source close to the project says journalists at the SMH have generally welcomed the move. Some are seeing it as an opportunity to appear on-air and expand their skills to be seen as more than print journalists in a digital environment. But one 2UE insider said: “The idea is that Kate McClymont will come running in with her latest breaking story. Clearly, this has been thought out by people in radio not people who work in newspapers because most reporters won’t even be at their desk until halfway through the show.”

While saying, “It’s like your fifth cousin once removed moving in,” one Herald staffer says there is no widespread antagonism to the move.

2UE insiders say the station may shift its entire operations to Fairfax’s Pyrmont headquarters in the future if next year’s SMH experiment is successful. This would help the company’s bottom line as it could give up its lease on the current 2UE studios on Sydney’s lower north shore.

One insider describes the 2013 programming strategy as “softer and fluffier, with more chit chat”. Another said: “They want to attract some soft FM listeners and swinging voters with more political variety.”

This is a dramatic shift from the strategy 2UE began in 2011 when it hired Morrison, Oldfield and Michael Smith — all outspoken conservatives — to host its key slots.

Highly-regarded Sydney sales director Josh Busteed recently left to take up a job with the Arab Radio Network in Dubai.

Station general manager Chris Parker declined to comment on next year’s programming schedule, saying it is still being developed and will be announced in coming weeks.

The final ratings survey for 2012 shows 2UE with a 4.3% overall share of the Sydney radio market compared to 15.2% for 2GB which is home to Alan Jones and Ray Hadley.

UPDATE: 2UE announced this afternoon that Jason Morrison will host the 2UE Drive program next year. This leaves the Breakfast slot vacant.