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Report On Business Postmedia to close London, Ont. printing plant, slashing 139 jobs

Canada's largest newspaper publisher will close its printing plant in London, Ont., cutting 139 jobs, as the company continues to outsource its printing to bring down costs.

Postmedia Network Canada Corp. has struck a deal with Metroland Media Group Ltd., an industry competitor owned by Toronto Star publisher Torstar Corp., to print the London Free Press starting this fall. Under the new agreement, London's daily newspaper will be printed out of Hamilton, where Metroland publishes the Hamilton Spectator.

The Free Press's newsroom currently shares a building with the soon-to-be-shuttered printing plant, but Postmedia declined to say whether the company plans to sell the building and relocate the newspaper's editorial functions.

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After the job losses, the Free Press will employ about 100 staff in its editorial, sales and other departments. Other community newspapers printed at the London plant will be moved to Postmedia's other production facilities.

"This is in line with the transformation programs that we've announced," Postmedia spokeswoman Phyllise Gelfand said in an interview. "As we have done in Regina, Edmonton, Calgary, Montreal and Vancouver, we have outsourced or moved production operations in those markets as well."

Postmedia has been aggressively cutting costs to cope with a precipitous drop in revenue, driven in particular by diminishing interest in print advertising, as well as the cost of paying interest on nearly $670-million in debt. The London plant closing is part of an $80-million cost-cutting plan the company is rolling out, which follows a separate three-year plan that slashed $136-million in annual spending between 2012 and 2015.

The union representing 135 of the printing plant staff who will soon be out of work criticized the move. "This is a tough, tough day for our London members and their families," Paul Morse, president of Unifor Local 87-M, said in a statement. "We are extremely disappointed with the aggressive cost-cutting at Postmedia."

The same Unifor local also represents some staff at The Globe and Mail.

The closing mirrors an industry trend toward outsourcing printing, where many publications have suffered double-digit percentage declines in print advertising revenue, year-over-year, as more ads shift to less costly online platforms. In January, Torstar announced it would shut its own plant in Vaughan, Ont., which has printed the Toronto Star for nearly 25 years. The Star will soon be printed by Transcontinental Inc., which also prints The Globe and Mail.

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