By Canadian Press

Postmedia to close more local newspapers, cut staff cost by 10 per cent

Jun 26, 2018 | 11:30 AM

Postmedia Network Inc. will close six small-town newspapers and reduce print publication of four more, while slashing 10 per cent of its total salary outlay through staff layoffs and voluntary buyouts by the end of August.

The company confirmed it will shut down the Camrose Canadian and Strathmore Standard in Alberta and the Kapuskasing Northern Times, Ingersoll Times, Norwich Gazette and Petrolia Topic in Ontario.

It will also stop printing three small daily papers — the Portage Daily Graphic in Portage La Prairie, Man., the Northern News in Kirkland Lake, Ont., and The Daily Observer in Pembroke, Ont.

It said it will continue to have a digital presence in the last three communities through free weekly publications — the Herald Leader in Portage La Prairie, Kirkland Lake Northern News This Week and the Pembroke News.

The High River Times in Alberta will move from publishing two days per week to once weekly and retain a website, it added.

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“While these are difficult decisions to make, they are necessary to manage our cost structure and structural transformation,” spokeswoman Phyllise Gelfand said in an email Tuesday.

Postmedia, which publishes the National Post, Vancouver Province, Toronto Sun, Calgary Herald and other large dailies, said in an internal memo obtained by The Canadian Press that it has undertaken a review of the organization and identified roles to be eliminated.

It said there will also be a targeted voluntary buyout (VBO) program for all editorial staff, as well as unionized staff outside the newsroom, open until July 10.

“If target savings aren’t met through the initial VBO program and targeted reductions, further staff reductions will be identified across our operations,” the memo states.

The company plans to discuss departure dates and severance packages with affected individuals over the next few weeks.

Postmedia CEO Paul Godfrey was not available for interviews Tuesday, the company said.

Last November, Torstar Corp. and Postmedia announced they had exchanged a total of 41 publications, mostly in Ontario, and would stop publishing most of them, resulting in 291 job losses.

The closings confirmed Tuesday are in addition to the shutdown of 180 community newspapers, 11 paid subscription daily newspapers and 23 free daily newspapers in Canada since 2008, according to the Local News Research Project database.

The loss of a newspaper can damage the fabric of a community, said April Lindgren, a professor who leads the Local News Research Project at Ryerson University’s School of Journalism.

“We know that local news plays a huge role in community life. It holds local power accountable, it gives people the information they need to act on issues that are important to them,” she said.

She added the loss of a news voice allows inaccurate news or “fake news” to spread, pointing out that community newspapers often have the largest newsrooms and act as a provider of news to other local media.

Unifor, which represents Postmedia workers at the Daily Observer and the Ottawa Citizen, is urging the federal government to speed up policy measures to save Canada’s newspaper industry.

“How many more community newspapers have to vanish before this government realizes we are running out of time to save local news?” said Unifor national president Jerry Dias.

The union said advertising dollars once spent in local newspapers are being “siphoned” out of the country by foreign online giants such as Facebook and Google, which don’t pay taxes.

The latest round of Postmedia staff reductions will be the second cross-company effort to reduce staff in the past two years as it works to slash costs in the face of advertising revenue declines.

In 2016, the company announced a plan to reduce its salary expenses by 20 per cent and initiated a voluntary buyout program, even as it paid bonuses to several top Postmedia executives.

Ottawa committed $50 million over five years in its latest budget to support “local journalism in underserved communities,” and plans to explore new models that would allow private and philanthropic support for “non-profit” journalism, including allowing Canadian newspapers to receive charitable status.

However, it stopped short of a much anticipated move to allocate more money and change the rules around the Canada Periodical Fund to provide funding beyond print magazines, non-daily newspapers and digital periodicals.

The federal proposals may help newspapers survive but they don’t address the fundamental problem, said Lindgren.

“I don’t see an end in sight (to closings) on the newspaper side because no one has figured out a business model to replace the old advertising-based business model.”

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Companies in this story: (TSX:PNC.B, TSX:PNC.A, TSX.TS.B)

Dan Healing, The Canadian Press