Postmedia Network Inc. is cutting deeply across its operations for the second time this month, slashing newsroom jobs at high-profile daily newspapers and halting publication of Sunday editions in several of its largest markets.
The media company is reeling from a deep freeze in the advertising market, which has seen revenue fall sharply at outlets across Canada. For every $7 publishers are losing in their print editions, a recent study suggests they are only earning $1 of digital revenue – and even that previously stable digital revenue has been in freefall through the first half of the year.
Postmedia told employees Monday afternoon that the Ottawa Citizen, Calgary Herald and Edmonton Journal would lose their Sunday papers and the National Post would stop printing on Mondays through the summer for the fourth year in a row.
"Well, we're really not making any money at all in those markets [on those days]" said chief executive officer Paul Godfrey. "So we've decided to keep everything online there and do away with print copies to reduce legacy costs."
The chain will also stop publishing on holidays such as Victoria Day and Canada Day.
Many jobs that have traditionally been performed in local markets, such as copy editing and page design, will leave those cities and be performed in a Hamilton facility that was set up to edit and mass produce pages for all papers in the chain.
The company wouldn't say how many jobs will be lost across the 10-paper chain, adding that some positions will be created in the non-unionized Hamilton facility. Internal memos from Ottawa and Montreal indicate about 20 journalists will be cut from each newsroom, which have about 105 journalists each, but the total number is not known.
"Everyone knows advertising revenue has been declining across the entire industry," Mr. Godfrey said. "Look, I think there is still a great demand from the public for having a print copy, but it's about how do you reduce legacy costs."
Mr. Godfrey also said he would accelerate plans to build online paywalls for some of the company's publications. It already has a paywall in Montreal, and previously announced plans to implement them in Ottawa and Vancouver. Those metered systems – which allow a preset number of free page-views before asking for money – could be up and running by mid-June.
"The falloff in print advertising is looking increasingly like what's happened in America for the last few years," Mr. Godfrey said. "The realization is you've got to face the reality of where the trend lines are going in respect to the advertising market. But make no mistake – this isn't a readership issue. The public is still very hungry for news."
The company faced an $11-million loss in the last quarter, and is about $516-million in debt. Like other publishers across the country, it has faced a difficult advertising market this spring and has responded aggressively in the face of continued weakness.
The staff memo sent by Mr. Godfrey said the company has spent the past two years honing its digital focus, and needs to move aggressively to engage readers and win back advertisers.
It's the second time this month that the company has announced layoffs, having earlier cut 25 of 58 jobs in its Postmedia News division. It made the decision to close the wire service and go with Canadian Press content for "commodity news" that can be produced by a wire service instead of staff reporters.
Earlier this month, The Globe and Mail announced its own plans for a paywall and asked staff to take unpaid leaves this summer to temporarily reduce costs.
It's not solely a Canadian problem – the Pulitzer-winning New Orleans Times-Picayune said last week it would cut publication to three days a week from seven and reduce the amount of staff in its newsroom to deal with decreased circulation and falling ad revenue.
"We did not make this decision lightly," said executive Ricky Mathews, in an interview in his paper explaining the changes. "It's the toughest part of transitioning from a print-centric to a digitally-focused company."