Postmedia plans deeper cuts as earnings sink
Just months after announcing a broad restructuring that centralized production of its newspapers and led to job losses at papers across the country, Postmedia Network Canada Corp. said it will cut deeper in hopes of reinventing itself as a profitable digital company.
In late May, the publisher of such titles as the National Post and Calgary Herald said it would eliminate editing at its local newspapers in favour of a central facility in Hamilton, Ont., close its wire service and stop printing Sunday papers in some markets in a bid to save up to $40-million.
It turns out the cuts were just the first phase in a broader three-year plan meant to reduce the company’s reliance on print advertising and prepare it for a digital future. Future changes will seek similar cost reductions – meaning the company is aiming to cut its operating expenses by $120-million by the end of the program.
“Going forward we’ll be a smaller revenue company and a smaller expense company,” chief executive officer Paul Godfrey said, adding the company wants to lower its expenses by up to 20 per cent. “We will be a more profitable company.”
The company wouldn’t elaborate on the next phase of its restructuring, although the executives on an earnings conference call did refer to format changes at some of its print publications, property sales, increased automation of some processes, outsourcing of business functions and further cuts to the work force.