Postmedia to slash salary expenses by 20% through buyouts, possible layoffs
TORONTO – Postmedia said Thursday it plans to reduce its salary costs by 20 per cent through voluntary staff buyouts, adding that layoffs are possible if its target isn’t met, as the media company announced its net loss for its most recent quarter nearly doubled.
Staff have until Nov. 8 to apply for the buyouts, the company said, with reductions coming from all levels and operations.
The newspaper chain announced the cost-cutting measure as it reported a fourth-quarter loss of $99.4 million or 35 cents per diluted share. That’s up from a loss of $54.1 million or 19 cents per diluted share for the same period a year ago.
Revenue for the quarter ended Aug. 31 totalled $198.7 million, down from $230.2 million. Postmedia attributed most of the revenue loss to a 21.3 per cent drop in print advertising and eight per cent fall in print circulation.
For its full financial year, Postmedia said it lost $352.5 million or $1.25 per share on $877.2 million in revenue. In the previous year, it lost $263.4 million or $1.98 per diluted share on $750.3 million in revenue.
The newspaper industry has struggled with declining ad revenue for years, but 2016 has been particularly brutal for the business.
In January, Postmedia cut 90 jobs and merged newsrooms in four cities, but maintained separate newspapers in each location following its acquisition of Sun Media’s English-language newspapers and digital properties last year.
It had been grappling with how to tackle its $648-million debt and those layoffs were part of cost-cutting measures.
The company aimed to reduce its annual operating expenses by $80 million. Postmedia said Thursday it is just $5 million shy of reaching that goal, which it expects to do by the end of the first quarter of its 2017 financial year.
In July, it announced a debt-restructuring plan that would see its total amount owed slashed by nearly half. The Ontario Superior Court as well as the company’s shareholders and debt holders approved the plan last month.
CEO Paul Godfrey told analysts and the media when the plan was announced that the company still had work to do to operate in a challenging industry – a sentiment he echoed Thursday.
“We do see some hopeful signs in our newer revenue initiatives,” Godfrey said in a statement. “We will continue to transform our business to address the industry disruption.”
This year, the company struck deals with two financial technology companies, Agility Forex Ltd. and Mogo Finance Technology Inc., for revenue in exchange for ad space.
© 2016 The Canadian Press