Yellow Pages Ltd. is cutting 300 jobs by November in a corporate "realignment" designed to make the company leaner and free up dollars to invest in its digital ventures as it continues to move away from print directories.
The company announced the layoffs, which represent about 10 per cent of its work force, on Thursday, and said they will "principally affect management positions that have been integrated within other functions or that are no longer aligned with the company's digital operations."
Long known for the weighty directories delivered to doorsteps, Yellow Pages is in the midst of a multiyear shift to a digital focus that aims to compete with companies such as Google Inc. as a destination for information about businesses. Its revenue depends increasingly on the advertising revenue it draws from YellowPages.ca and Canada411.ca, as well as the YP mobile app.
"As we invest to improve our digital media and marketing solutions offerings to Canadian businesses and consumers, the redeployment of resources is a top priority," said Julien Billot, the company's president and chief executive officer, in a statement.
Since May of 2014, Yellow Pages has been working on a turnaround strategy. In its last quarter, the company's overall revenue fell 7.2 per cent, year over year, while print revenue fell 21.2 per cent. But crucially, the company boosted its digital visits by 5.6 per cent and added customers at a faster rate, both of which are key metrics for its future.
"Corporate realignment was always a part of the [return-to-growth] plan," said Haran Posner, an analyst at RBC Dominion Securities Inc., in a research note. He estimated the cuts could yield incremental savings of $23-million to $30-million.
At the same time it is shedding staff, the company also said it will continue hiring within its digital arm. Most businesses still advertise in print and online with Yellow Pages, and nearly 20 per cent of clients choose digital ads exclusively. But the company aims to make half of its clientele digital-only advertisers by 2018.
"For us, today's announcement further reinforces the view that Yellow's digital transformation is on track," said Aravinda Galappatthige, an analyst with Canaccord Genuity Corp., in a note to investors.