Toronto Star to cut jobs citing declines in ad revenue

The Globe and Mail

A pedestrian walks past a Toronto Star newspaper box in front of the Toronto Star building at One Yonge Street in Toronto January 18, 2008. (MARK BLINCH/REUTERS)

Canada’s largest newspaper is cutting dozens of jobs from its newsroom, outsourcing editing duties that are increasingly seen as too costly for cash-strapped dailies trying to cope with falling advertising revenue.

The Toronto Star is slashing 55 jobs, about 9 per cent of its workforce, with about half coming out of the editorial department. The paper plans to outsource copy editing and page design to Pagemasters North America, which offers those services at a steep discount to what the papers typically pay inhouse.

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The move comes as print advertising continues to decline at newspapers across North America. Papers have seen gains in digital advertising as they move more of their content online, but print advertisements are far more lucrative for publishers. Canadian chains such as Postmedia Network Inc. and Sun Media have also taken copy editors out of newsrooms, opting to do the work out of centralized facilities to save money and reduce overlap.

The Star’s cuts are part of a broader trend that has seen newspapers outsource jobs that aren’t directly related to the reporting of stories – newspaper companies have outsourced everything from printing to delivery as they try to bring down costs. The Globe and Mail also outsources some work to Pagemasters.

“It’s challenging times in the newspaper business,” said Star spokesman Bob Hepburn. “And in these challenging times we need to protect the reporting side of the business, which we have managed to do here.”

Pagemasters North America is owned by The Canadian Press, which is owned by Star parent Torstar Corp., The Globe and Mail and La Presse owner Gesca Ltée. The Star tried to outsource much of its page design work three years ago, but the plan was called off after the union stepped in and found other ways for the company to save on costs.

The top union rate for an editor at Pagemasters is $48,000, while the same job at the Star comes with an annual salary closer to $85,000.

Star editor Michael Cooke said in a memo to staff that “the real-life business challenges” facing the paper have made the changes necessary.

“It is never easy to take decisions that reduce or eliminate staff,” he wrote. “But the real-life business challenges we face (you know what they are, you read the same stories I do) are brutal and require action. Doing nothing – or doing ‘trims’ – is not an option. It’s a death sentence.”

The company said it consulted with its union, and asked employees for volunteers before announcing more details in the coming weeks. Torstar also announced a dozen job cuts at its Metro chain of commuter papers.

The company is set to announce fourth-quarter earnings Wednesday. It earned $14.1-million in the third quarter, down from $25-million a year earlier.

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