Ottawa Sun, Kingston Whig-Standard face job cuts
Pierre-Karl Peladeau, president of Quebecor, walks by media people to testify at a legislature committee on Labour 2011 at the legislature in Quebec City, Tuesday, February 1. (Jacques Boissinot / THE CANADIAN PRESS)
Published Tuesday, November 13, 2012 11:39AM EST
Last Updated Tuesday, November 13, 2012 4:15PM EST
MONTREAL -- Quebecor Inc. is cutting about 500 jobs at its Sun Media newspaper division in a move that includes closing two production facilities in Ontario, saying it has been hit by lower advertising.
The cuts represent about nine per cent of the approximately 5,680 employees in Quebecor's news media division and is part of an effort to reduce annual costs by $45 million.
"Although our circulation revenue has stabilized due to strategic pricing increases, the advertising sector continues to experience declines through the news and media industry," chief executive Pierre Karl Peladeau said Wednesday.
He also noted that "newspapers across the world have been impacted in the last 10 years by the introductions of new technologies, changing dramatically the incumbents of printing products."
The Journal de Montreal and the Journal de Quebec now have paywalls for online readers, he said, adding that the rest of Quebecor's major publications will add paywalls before the end of this year.
"In addition, we will further optimize and consolidate all our industrial operations from pre-press to printing, transportation and distribution into fewer centres of excellence."
Quebecor will also "dispose or shut down all non-core activities" to reduce costs, said Peladeau.
During the conference call, Peladeau was not specific about the number of employees who will lose their jobs, saying "several hundred employees" will be leaving the organization.
"I would like to mention that I feel very sad for the numerous redundancies we were forced to implement in our newspaper division."
A press release from Quebecor put the number at about 500, and identified the production plants to be shuttered as being in Ottawa and Kingston.
The company's website says it has "ultra modern" printing facilities in Mirabel, Que., and suburban Toronto, which serve local, regional and national markets.
There also had been earlier reports Quebecor (TSX:QBR.B) would eliminate the position of publisher at some newspapers. Peladeau, again, did not provide details.
"We eliminated several layers of management to streamline our processes, reduce our costs and bring decision making closer to the local markets."
Peladeau said Quebecor will use its media platform, including cross promotional activities with Sun News TV and French-language TVA Group, to "bundle our news media products into an integrated multimedia advertising solutions for our clients."
It remains committed to its publications, which include the Toronto Sun and other dailies across Canada under the Sun and other banners, Peladeau added.
A representative for Sun Media declined to provide any additional details.
Quebecor's news media division employed 5,680 people as of Dec. 31, 2011, of which 1,700 were unionized.
Sun Media has 36 paid-circulation daily newspapers and six free daily newspapers as well as almost 200 community newspapers, shopping guides and other specialty publications. It also provides commercial printing and related services as well as distribution for newspapers, flyers and magazines.
"Clearly, this is a blow to journalism in Canada," said Paul Morse, head of the Southern Ontario Newsmedia Guild, which represents some of Sun Media's employees.
"The erosion of these kinds of jobs is a significant problem for newspapers that are going to be dealing with trying to put out quality journalism with workforces that are clearly stretched beyond the limit," Morse said.
"This is a terrible day for journalism in Canada."
The Montreal-based media and telecom company, which also owns the Videotron cable and phone business and the TVA television network in Quebec, reported Tuesday it had $18.6 million or 30 cents per share of net income attributable to shareholders in the third quarter.
That's down about 29 per cent from $26.1 million or 41 cents a year ago.
On the other hand, Quebecor's adjusted income from continuing operations rose to $52.1 million or 83 cents per share -- nine cents a share above the consensus estimated compiled by Thomson Reuters.
The adjusted income was up from $40 million or 63 cents per share in the third quarter of 2011.
Quebecor's third-quarter revenue also improved slightly, rising about $45 million to nearly $1.06 billion -- up from $1.01 billion a year earlier.
"The corporation continued its growth in the third quarter of 2012 despite a fiercely competitive business environment in most of its lines of business," Peladeau said.
"It increased its revenues by 4.4 per cent, its operating income by 10.4 per cent and its adjusted income from continuing operations by 30.2 per cent, confirming the profitability of the major investments made in recent years."