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The Toronto Sun offices on King Street East in Toronto.Deborah Baic/The Globe and Mail

The Toronto Sun is a newspaper without an editor-in-chief, at least for the time being.

James Wallace, a former reporter and columnist with the paper who was appointed to the job in 2008, told staff he would be stepping down Monday afternoon. Executives at Sun Media, who own the Toronto tabloid, didn't respond to requests for comment but confirmed his departure.

Sun Media is going through drastic changes as it tries to deal with shifts in advertising spending that has seen print revenue decline across the industry. It has laid off more than 1,000 employees from its newspapers since the recession, and recently closed unprofitable weekly papers in Lindsay and Midland, Ont.

The chain has also consolidated many newsroom roles, replacing editors and publishers with regional handlers who handle several papers at once instead of focusing on a single publication.

The Sun – which has a weekday paid circulation of 166,300 – recently underwent a round of voluntary buyouts, which saw several long-time employees part way with the chain.

It's not an issue that is unique to Sun Media: The problem for publishers across North America is that digital revenues are not increasing fast enough to make up for the losses in print.

"Consequential to the restructuring initiative we implemented in the fourth quarter of 2012 and the first quarter of 2013, we have reduced our work force by more than 550 employees, discontinued a number of unprofitable and nonstrategic publications," outgoing chief executive officer Pierre Karl Péladeau said in May. "We will continue to critically evaluate and make strategic changes to our publications as appropriate, and we will continue to streamline our work force to adopt a lean and effective operating structure."

Postmedia Network Inc., which publishes the National Post and metropolitan dailies such as the Calgary Herald and Vancouver Sun, posted a $112-million loss in its last quarter. Most of that was a $94-million non-cash writedown, but print advertising dropped by $17.6-million in the quarter to $113-million, while digital revenues increased by only $500,000 to $24-million.

The company has responded by cutting its operating budget by more than $60-million in the last year, with plans to double that to $120-million within another two years. It has made the cuts by reducing the number of publishing days at some dailies, laying off staff and selling real estate.

Sun Media's parent company Quebecor Inc. is also dealing with changes, with Mr. Péladeau stepping down in May to make way for Robert Dépatie, who previously ran the company's profitable Vidéotron division.

Quebecor's latest quarterly earnings highlighted Mr. Dépatie's challenge – operating profit increased 4.7 per cent in the telecommunications division to $317-million while it slid 63 per cent to $5.7-million in the media division.

The division published 36 daily papers and six free dailies, and almost 200 community papers and is the largest publisher in the country by number of titles.

Mr. Péladeau is still chairman of Sun Media, whose editorial operations are being overseen by Eric Morrison who took the job last year amid promises to create "a national editorial management structure that will integrate Sun Media's English-language newspapers, websites and broadcast channels."

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