Postmedia lays off staff, merges newsrooms in four cities to slash costs

TORONTO – Postmedia is cutting approximately 90 jobs and merging newsrooms in four cities as Canada’s largest newspaper chain steps up plans to slash costs in the midst of mounting revenue losses.

The company owns two newspapers in each of the cities of Ottawa, Calgary, Edmonton and Vancouver following its acquisition of Sun Media last year. Now those city papers will share a newsroom, although they’ll continue putting out different publications.

In an interview, Postmedia CEO Paul Godfrey said the decline in print advertising revenue since the Sun Media acquisition drove the changes.

“The business model has been disrupted,” Godfrey said. “Our goal was trying to keep the newsrooms separate at the time, but with the continuation of the decline, we thought the important thing was to keep the newspapers open and we figured out this was the best way to do it.”

The two Calgary newspapers — the Calgary Sun and Calgary Herald — will share one editor, as will the Edmonton Journal and Edmonton Sun, Godfrey said.

He said the Ottawa Citizen and Ottawa Sun will also have one editor, adding that the company is looking for someone to fill that role.

In all, about 90 staff have been laid off. Phyllise Gelfand, the company’s vice-president of communications, said those layoffs include about 35 people in Edmonton, 25 in Calgary and 12 in Ottawa.

Gelfand said there were no job losses in Vancouver but the company will offer buyout packages in the coming days. The two Ottawa papers will also offer buyouts, which could result in another 50 employees leaving the company, she said.

Paul Morse, president of Unifor Local 87-M — representing some of the Ottawa employees who were let go — accused Postmedia of breaking its promise to continue operating two independent newspapers in each of those four markets.

The federal Competition Bureau approved Postmedia’s purchase of Sun Media’s English-language newspapers and digital properties last spring. The bureau said the deal was unlikely to substantially lessen or prevent competition.

Postmedia executives planned to keep the newsrooms of each outlet separate, Godfrey said at the time, but were considering merging other departments.

“Clearly that’s gone right out the window today,” Morse said.

Postmedia says the move won’t have an impact on editorial freedom, but will simply reduce some duplication between what the newsrooms produced.

“A small rewrite desk and an editorial team will ensure that, you know, the right voice and content gets to the right product and platform,” said Gelfand.

In a statement, the Communications Workers of America union’s Canadian chapter called on the federal government to intervene with “legislation or regulations to limit concentration of media ownership.”

John Pecman, the head of the Competition Bureau, has a year from when the transaction finalized to bring an application to the tribunal to challenge the decision. That deadline passes in March.

However, it’s unlikely it will be challenged, said Phil Norris, a spokesman for the bureau.

“These types of business decisions by Postmedia … are generally not cause for us to re-examine the transaction.”

Postmedia is not obliged to consult with the bureau if they decide to close newspapers, he added. However, Godfrey said he notified the bureau prior to Tuesday’s announcement.

The layoffs included Stephanie Coombs and Margo Goodhand, who were the managing editor and editor-in-chief at the Edmonton Journal respectively.

Multiple people lost their jobs at the National Post’s sports department. Gelfand said the company is creating a national sports writing team to consist of existing employees.

Ottawa Sun sports reporter Chris Hofley was let go after four years with the newspaper. He said the writing was on the wall after the Postmedia purchase of Sun Media assets.

“We all thought there was going to be a change coming, for sure,” he said.

Ottawa Sun columnist Sue Sherring, who kept her job, was in tears as she spoke to media in Ottawa.

“It’s happening everywhere (in the business),” she said. “It’s not fun.”

The cuts come less than a week after Postmedia announced it was stepping up its efforts to reduces costs to overcome continued losses in advertising, print circulation and digital media revenue.

The company is now aiming for cost reductions of $80 million by mid-2017 — up from its previous goal of $50 million in cuts by the end of 2017.

Postmedia also said it was on track to meet the $50-million target by this May 31, the end of its fiscal third quarter.

— With files from Bruce Cheadle in Ottawa and David Friend in Toronto.

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