Following a dip in advertising sales this fall that has affected companies across the media industry, Postmedia Network Canada Corp. is offering another round of buyouts to employees at its two daily papers in Vancouver.
Staff at the Granville Square building that houses The Vancouver Sun and The Province received letters from the company last Friday, Dec. 9, explaining that it would once again put forward a "voluntary staff reduction plan" to cut costs at the papers.
The announcement comes in the wake of disappointing advertising sales in September and October, a season when other media companies in both print and broadcast, such as Torstar Corp. and Astral Media Inc., were also reporting lagging demand.
That's a concern, since September and October tend to be crucial times for advertising sales for newspapers: The biggest spending for the holiday season often happens in those months, as well as increased advertising from the crucial automotive segment. In its most recent results for the fourth quarter, released in October, Postmedia reported that print advertising revenue fell 5 per cent in June, July and August to $145.6-million. But at the time, chief executive officer Paul Godfrey also said that after a year of aggressive cost cutting across its operations, the biggest cuts were behind them.
"A very fragile and volatile economy has resulted in weak demand for advertising. [First quarter]results were disappointing and there is no expectation that advertising revenues will stabilize any time soon," Kevin Bent, president of the company's Pacific Newspaper Group, wrote in a memo to employees. "As a result, PNG is considering several significant transformational and operational changes as well as continuing with our aggressive approach to cost containment."
The continuing decline is a worrying trend for any newspaper company, as most still depend heavily on print revenues to keep their operations afloat. Print advertising accounts for roughly 63 per cent of Postmedia's total revenue.
The last round of buyouts at the Vancouver papers happened at this time last year, and led to more than 30 jobs being cut, said Gary Engler, vice-president of Local 2000 of the Communication, Energy and Paperworkers Union, which represents employees at both papers. This round is targeting mostly non-editorial staff, including salespeople and accounting.
Last month, Torstar also announced a round of buyouts offered to employees at the Toronto Star newspaper, part of a continuing cost-cutting effort for the publisher.
"We're upset to see jobs go, that's for certain. Especially, we're upset at the extra workload that the people remaining find themselves having to do. Clearly, it's an indication that the newspaper business is not in the kind of shape that we all wish it was in. That would be our single biggest concern," Mr. Engler said.
"We believe the ordinary Canadian suffers, and in the case of the Sun and The Province, certainly the people of British Columbia suffer when the kinds of work – investigative journalism and keeping governments and corporations to account – doesn't take place simply because they've cut so many resources out of here."
Under the collective agreement at the papers, the buyouts will offer six weeks of pay for each year of service, up to a maximum of $150,000. The company is accepting applications until Jan. 13.
On Friday, Postmedia spokeswoman Phyllise Gelfand confirmed that the buyouts were offered and said this is a local initiative, not a program of buyouts across the newspaper chain. Postmedia has worked hard over the past year to reduce costs and pay down debt. According to its most recent financial results, it paid $17.3-million less in compensation in the fourth quarter than it did in the same period last year.