UPDATE: Postmedia Begins Job Cuts

By: E&P Staff

Postmedia Network Inc., Canada’s largest newspaper chain and successor to bankrupt Canwest after the sell-off of that debt-laden group’s broadcast business, has started workforce reductions, according to the Communications, Energy and Paperworkers Union.

According to The Newspaper Guild, the company already has cut in Calgary and Edmonton.

The Guild posted the text of a Sept. 3 letter to employees in Victoria and Vancouver B.C., from Postmedia Executive Vice President of Operations in Western Canada Kevin Bent, announcing that the company will accept applications for buyouts from employees covered by the former Guild collective agreement.

That agreement calls for six weeks’ pay per year of service, to a maximum of $150,000 (Canadian).

Under the current circumstances, Bent writes, “we must continue to find ways to serve our readers and advertisers in more cost-effective ways while we continue to transform our business.

When an Ontario Superior Court judge approved the sale in May, the deal offered jobs to all full-time employees and 90% or more of the part-time workforce. While “that did occur,” said Postmedia Communications Director Phyllise Gelfand, the “current restructuring and… transformation into a digital-first company has seen local operations making business decisions that involve staffing reductions.

Gelfand had no exact number of positions that would be eliminated, nor would she say if they affected all papers or departments.

Calling the group’s properties “profitable enterprises,” CEP media Vice President Peter Murdoch said in a Sept. 2 statement that the new owners seem “more focused on returns to U.S. financial gamblers than building these vital newspapers.”

CEP said it is studying the possibility of challenging the nature of Postmedia’s ownership, which must be three-quarters Canadian in order to deduct the cost of advertising.

In a deal that closed this summer, the papers were acquired for $1.1 billion (Canadian) by former Sun Media tabloid publisher and National Post CEO Paul Godfrey and others, with a U.S. hedge fund’s financial backing.

In May, The Globe and Mail identified the hedge fund as New York-based Golden Tree Asset Management, which specializes in distressed assets and was involved in the Canwest reorganization. It also said TD Asset Management and Invesco Trimark were among the financial backers.

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