CanWest axes 560 jobs by Grant Robertson
Source : Globe & Mail
November 12, 2008
TORONTO — Burdened by debt, CanWest Global Communications Corp. is cutting 560 jobs from its operations, hoping to buy itself breathing room to withstand an economic downturn.
Canada's largest media company, which owns the Global Television network and daily newspapers in major cities across the country, is hoping to cut $61-million from its annual operating costs. In recent months, the firm has moved closer to breaching one of its bank covenants amid a slumping economy that is sapping advertising dollars from the industry.
The cuts come a year after CanWest eliminated about 100 jobs at its newspaper operations through buyouts, and centralized some operations in larger cities to save costs.
“The current environment requires that we go further,” CanWest chief executive officer Leonard Asper said in a statement. “We are implementing a number of initiatives that will provide savings that will allow us to better compete in the current economic environment.”
CanWest Global Communications
The 560 positions – 210 in broadcasting and 350 in publishing – represent about 5 per cent of its 10,478 employees in Canada. Spokesman John Douglas said a breakdown of how many jobs would be affected in each market could not be provided. At the newspaper division, the company has not decided how many layoffs will be required after voluntary severance is offered.
The firm plans to save newsprint costs by reducing the size of its newspapers. As well, the National Post is pulling out of unprofitable markets, including a recent move to cut distribution in Manitoba.
CanWest's broadcasting headquarters in Toronto, which houses specialty channels and some network TV operations, took the brunt of the cuts in broadcasting. CanWest is cutting costs at its E! network by moving the packaging of local news broadcasts to larger centres. The cuts had been telegraphed by executives after the Canadian Radio-television and Telecommunications Commission ruled against CanWest's bid to charge cable firms for Global's signal. That would have been worth about $75-million.
“We always thought they had already cut to the bone. I think they're pretty much there now,” Peter Murdoch, vice-president of media for the Communications, Energy and Paperworkers Union, which represents Global TV employees and several CanWest newspapers.
Media companies are facing a tough environment since many are reliant on advertising. CanWest gets about 85 per cent of its revenue from ads. However, the company has also been carrying $3.6-billion of debt after its purchase of 13 specialty channels in the takeover of Alliance Atlantis Communications. That has left CanWest with little flexibility on its bank agreements in the event ad revenue starts to erode at a faster rate. The company reports quarterly earnings Friday, and financial analysts will be looking for signs of how much the economic downturn has started to hit the company.
© Globe and Mail
Canada's largest media company, which owns the Global Television network and daily newspapers in major cities across the country, is hoping to cut $61-million from its annual operating costs. In recent months, the firm has moved closer to breaching one of its bank covenants amid a slumping economy that is sapping advertising dollars from the industry.
The cuts come a year after CanWest eliminated about 100 jobs at its newspaper operations through buyouts, and centralized some operations in larger cities to save costs.
“The current environment requires that we go further,” CanWest chief executive officer Leonard Asper said in a statement. “We are implementing a number of initiatives that will provide savings that will allow us to better compete in the current economic environment.”
CanWest Global Communications
The 560 positions – 210 in broadcasting and 350 in publishing – represent about 5 per cent of its 10,478 employees in Canada. Spokesman John Douglas said a breakdown of how many jobs would be affected in each market could not be provided. At the newspaper division, the company has not decided how many layoffs will be required after voluntary severance is offered.
The firm plans to save newsprint costs by reducing the size of its newspapers. As well, the National Post is pulling out of unprofitable markets, including a recent move to cut distribution in Manitoba.
CanWest's broadcasting headquarters in Toronto, which houses specialty channels and some network TV operations, took the brunt of the cuts in broadcasting. CanWest is cutting costs at its E! network by moving the packaging of local news broadcasts to larger centres. The cuts had been telegraphed by executives after the Canadian Radio-television and Telecommunications Commission ruled against CanWest's bid to charge cable firms for Global's signal. That would have been worth about $75-million.
“We always thought they had already cut to the bone. I think they're pretty much there now,” Peter Murdoch, vice-president of media for the Communications, Energy and Paperworkers Union, which represents Global TV employees and several CanWest newspapers.
Media companies are facing a tough environment since many are reliant on advertising. CanWest gets about 85 per cent of its revenue from ads. However, the company has also been carrying $3.6-billion of debt after its purchase of 13 specialty channels in the takeover of Alliance Atlantis Communications. That has left CanWest with little flexibility on its bank agreements in the event ad revenue starts to erode at a faster rate. The company reports quarterly earnings Friday, and financial analysts will be looking for signs of how much the economic downturn has started to hit the company.
© Globe and Mail
