Postmedia CEO Paul Godfrey
Postmedia Network Canada Corp. says job cuts across its chain of newspapers will save the company up to $35-million.
Postmedia began its fiscal year this fall with the announcement of buyouts offered at its newspapers, including its flagship brand, the National Post. The media company owns 11 major daily newspapers as well as 35 community papers.
Postmedia said Thursday that restructuring initiatives, consisting mainly of employee severance, will cut between $30-million and $35-million in costs from salaries over a 12-month period. Between buyouts and layoffs of both part- and full-time workers, outsourcing its advertising production, and centralizing all of the papers' pagination duties at one operation in Hamilton, Ont., Postmedia has cut the equivalent of more than 500 full-time jobs.
"We're just in the middle of our whole transformation program at the present time," Postmedia chief executive officer Paul Godfrey told analysts on a conference call. He noted that many of the company's collective bargaining agreements are coming up for negotiation this year. "Hopefully we'll achieve even more efficiencies as we go along."
Postmedia reported a drop in earnings Thursday, to $5.6-million for the three months ended Nov. 30, down from $61.8-million in earnings of the CanWest newspaper chain a year earlier.
In July, the newspapers emerged from creditor protection after a group of the company's unsecured lenders agreed to buy the publishing business for $1.1-billion. Postmedia is planning a listing on the Toronto Stock Exchange some time this year.
Revenue totalled $287.1-million, up 0.2 per cent from CanWest's revenue in the same period in 2009.
Since the economic downturn, as is the case with many newspapers, retail and classified advertising at Postmedia continues to be weak. So far, national advertisers have been first to expand their budgets again, making up for weakness in other print advertising. Growth in national ads and inserts led to a modest 1.6 per cent increase in print ad revenues in the first quarter.
However, Mr. Godfrey said on Thursday that national ad sales have weakened in the past five to six weeks, and was cautious about the advertising landscape going forward.
Digital revenues, which account for roughly 8 per cent of Postmedia's overall revenue, increased 4.6 per cent.
Postmedia has been developing its digital presence in the current - in December, it launched a group-buying program called SwarmJam, which is modelled after U.S. business Groupon and offers daily deals on the Postmedia newspaper websites.
Also in December, Postmedia launched ad-supported iPad applications for all of its daily newspapers, with iPhone and iPod apps as well for the National Post. In an interview, Mr. Godfrey said advertising clients on the new platform include Air Canada, Disney, Cisco and Rogers.
"We're very encouraged. We're in a sort of trial process at the present time ... Everybody wants to see what's the response from the public, and are there ways of making improvements," he said. The apps have counted more than 140,000 downloads so far. Mr. Godfrey would not reveal to what extent the new apps have begun to affect overall digital revenues.