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File photo of Postmedia Network Inc. CEO Paul Godfrey walking through the National Post newsroom in Toronto.

Darren Calabrese/darren calabrese The Globe and Mail

Postmedia Network Inc. is cutting deeply its operations for the second time this month, slashing newsroom jobs at 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. 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.

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.

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Here's why it was necessary, according to chief executive officer Paul Godfrey.

What's happening?

The industry has had happier days. You know what, it's been obvious that we're going to consolidate print. In Hamilton, what we do is pagination and layout of pages. Everyone knows advertising revenue has been declining across the entire industry. A lot of revenue has been lost in Canada, gone to foreign ownership and foreign controlled digital companies, and the sad part is they aren't regulated, yet Canadian newspapers are. We can get back to that in second.

So what are your plans exactly?

We are going to expand our operations at our centre in Hamilton. It does a great deal of our pagination and layout, as well as further expand our operation to accommodate more editorial production and basically do story selection of national and world news, the sort of editing and proofing line-by-line which would normally be done at newspapers across the country. That leaves the newspapers to control the creation of local content. We're expanding that aspect. We're committed to creating compelling content in all of our publications and we're going to expand cuts to our costs with respect to our print legacy costs so we can invest in the digital side of things. There's no doubt that's where things are going.

So if someone were to walk into one of your retooled newsrooms, what would the journalists be doing?

Local sports. Local news.

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And what about the printing schedule?

We'll stop production in Calgary, Ottawa and Edmonton for Sunday editions. Sunday papers are really not making any money at all in those markets. So we've decided to keep everything every thing online there and do away with print copies to reduce legacy costs.

The release says you are also looking at other printing options.

We've discontinued Mondays in the summer at the Post, we're analyzing whether to do that throughout the year or not. I knew you'd ask about that.

Well, it's a fair question. You talk about legacy costs, how important will it be in coming years to have a paper landing on doorsteps?

Look, I think there is still great demand for the public having a print copy. It's just how do you reduce legacy costs. Are we near the stage of no print paper, I don't believe that.

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Do you have a number for the layoffs?

It will vary from place to place, we're still analyzing at this point. We wanted to give staff notice that we made the decision on pages and proofing and layout story selection on national and world news going to Hamilton and the realigning of the money we save going into digital.

What's going on in the industry that this is needed?

Your own publisher asked people to take unpaid holidays in the summer, we're not unique. It's the newspaper industry worldwide, I have some people in from Austria and Germany telling me the same thing. One of them indicated to me that they've gone from 75 per cent of revenue coming from advertising down to 40 per cent and circulation now making up 60 per cent. Newspapers are facing reality and know that they need to do something about the infrastructure costs they face and legacy costs. Your won't find people buying new presses very often these days.

But there's been a lot of layoffs recently – what's actually changed?

People say people are not reading newspapers any more but numbers in print and online are up. This is not a question of readership diminishing, it's a question of print ad revenue. The falloff of print ad revenue in the last year in increasingly more like what's happened in America for the last few years. I think the realization is you've got to face reality on where the trend lines are going. The public is still very hungry for news, but the answer is giving people news when they want to get it on the platform of their choice.

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So the industry keeps talking about all of its readers, but then cuts the staff needed to produce readable copy. How do you keep generating worthwhile content while making cuts?

By doing things like we're doing today.

By outsourcing functions that aren't directly related to newsgathering?

No, by centralizing.

This interview has been condensed and edited

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