“This is absolutely not a reflection on the hard work and contributions they have made to our company but rather an outcome of economic contraction that has affected so many companies globally and the inherent challenges of our industry,” wrote Postmedia president and chief executive Andrew MacLeod.
In a townhall Wednesday, Mr. MacLeod said the areas affected will include editorial, sales, production and distribution. He told employees that inflation and revenue declines have combined to create a “perfect storm” for the company, which owns more than 120 media properties, including the National Post, Vancouver Sun and Montreal Gazette.
“To be blunt, without using a lot of fancy words, we need to get our costs down,” he said, according to a recording obtained by The Globe and Mail. “We need to have our costs be more in balance with the revenue environment that we find ourselves in.”
A spokesperson for the company said the publications moving to digital-only starting Feb. 27 include Fort McMurray Today, the Cold Lake Sun and the Cochrane Times.
In his memo, Mr. MacLeod positioned the changes as necessary to building a “sustainable media organization” while “managing cost and mitigating revenue decline.”
Postmedia will also look to outsource printing operations “where it makes sense,” and has struck an agreement with Glacier Media to move all of its printing for Saskatchewan to Estevan Printing. As a result, the company will sell its building in Saskatoon.
Separately, Postmedia said Wednesday it has sold the Calgary Herald building to U-Haul Co. for $17.25-million.
The changes come a week after the company posted a deep quarterly loss. Postmedia lost $15.9-million in its most recent quarter compared with $4.4-million in the same period the year before. Revenue from advertising and circulation fell 5.9 per cent and 5.4 per cent respectively, though overall revenue increased in part owing to the company’s parcel-delivery business.
Newspapers have been grappling for years with a decline in print advertising and circulation revenue while trying to compensate by growing digital ad revenue and subscriptions. As a result of the tough conditions, Postmedia has shuttered titles, implemented layoffs and offered voluntary buyouts over the past few years. In 2022, the company also purchased Brunswick News, which publishes daily and weekly titles, including the Telegraph-Journal in Saint John.
Other changes announced Wednesday include subleasing a building in Regina and moving all Saskatchewan-based employees to permanent remote work.
“We know that this amount of change is unsettling but we must continue to focus on our strategy and delivering for our audiences, clients and partners,” Mr. MacLeod wrote.
The financial challenges in the industry have strained other media outlets recently, too. The former joint owners of Torstar Corp., which publishes the Toronto Star, fell out last year in part because of disagreements over cost-cutting. Torstar held talks with Postmedia about combining the two companies, but no deal was completed, The Globe has reported.