WINNIPEG – Canwest Global let go 560 employees today as part of an effort to cut the broadcast and newspaper company’s annualized operating costs by approximately $61 million. Of that number 210 are being cut from the broadcasting side.
The job cuts amount to 5% of the company’s total workforce and will happen through voluntary buyouts, attrition and reductions. These reductions are in addition to several hundred jobs that have already been eliminated over the last two years.
“These actions are a result of the current economic environment as well as the structural challenges in the conventional television model,” said the company’s press release. “They also reflect Canwest’s ongoing review of work processes to achieve maximum operating efficiencies, and its transformation into a multi-platform media company that is building its audience using digital media.”
"Having completed an assessment of our Canadian operations and, after careful consideration, we are implementing a number of initiatives that will provide savings that will allow us to better compete in the current economic environment, without compromising our core products and services," said Leonard Asper, president and CEO, in the release. "It will not impact our strategy to invest in growth media like digital online, mobile and specialty channels.
"Previous initiatives including the Canwest News Service, Digital Newsrooms and synergies achieved through the integration of the former Alliance Atlantis specialty channels have helped us manage costs and reduce our workforce. However, the current environment requires that we go further – especially in light of the CRTC’s failure to adequately recognize the structural issues facing conventional broadcasters,” he continued, referencing the Commission’s recent decision not to allow conventional broadcasters to collect a fee for carriage.
“Although it was a very difficult decision to implement staff reductions, we believe that these actions are required to enable Canwest to maintain its strength, build market position and be ready at the first sign of an economic recovery,” added Asper.
The release explains the cuts as follows:
“A series of initiatives, including the restructuring of its news operations at E! stations, will result in Canwest Broadcasting reducing its workforce by approximately 210 positions and reduce operating expenses (excluding program costs) by approximately $17 million from fiscal 2008 levels. The restructuring initiatives are aimed at reducing infrastructure costs without impacting audience access to local programming and ensuring the company can continue to satisfy its licence conditions. These initiatives are expected to result in restructuring costs of approximately $7 million in fiscal 2009.
“Certain activities non-core to the broadcasting business will be eliminated and other operational efficiencies will be achieved through elimination of positions across all departments. Total annualized savings to 2008 expenditures are expected to be approximately $21 million.”
And on the publishing side:
“A series of initiatives in Canwest Publishing will eliminate approximately 350 positions and is expected to reduce operating costs in fiscal 2009 by between $25 million and $30 million. The unit is expected to incur restructuring costs of between $18 million and $22 million in fiscal 2009.
“These initiatives include a restructuring of the community newspaper group, a streamlining of some production processes and web width reduction in certain Canwest newspapers. The National Post will also institute changes to accelerate its road to profitability by focusing on its profitable markets, reducing unproductive and deeply discounted circulation and utilize new technology that enables it to better target key high value readers while increasing web engagement with its brands. In total, these initiatives are expected to reduce costs on an annualized basis by between $35 million and $40 million.
“The development and creation of news and information will not be impacted by the changes. Canwest remains committed to being Canada’s premier news gathering organization combining the strength of local reporters and the reach of the Canwest News Service.”
While some of the changes had been planned, thanks to the economy others have been accelerated because of the economic slowdown “while other initiatives were identified through a workflow review that has been undertaken within every division over the past several months,” adds the release.
The company will also continue to invest in the areas that provide the greatest long-term growth including, as written in the release:
* Internet video streaming agreements that make more than 50 hit programs accessible online anytime.
* A video on demand (VOD) agreement that provides access to more than 60 hours of people’s favourite first-run Global and E! programs. This expands Canwest’s VOD offering to four categories.
* New online partnerships including Gasbuddy.com and Clubzone.com that will increase traffic to the Canada.com site by 25%.
* The continued expansion of Canwest News Services and Canwest Editorial Services’ client base and service offerings.
* The introduction of new specialty channels in 2009 to further capitalize on this growing segment where the company is a recognized leader.
"In these uncertain economic conditions we remain focused on strengthening our balance sheet, protecting and exacting better performance from our core assets and investing in growth media that responds to the evolving habits and expectations of consumers, advertisers and distributors," said Asper.
"While we anticipate that advertising revenues will be negatively affected by the current economic slowdown, Canwest’s diversified revenue base and strong fiscal management will see it though this period and management remains dedicated to taking the necessary steps to provide the company with the flexibility required over the longer-term while building for the future."
