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Postmedia to lay off 80, permanently close 15 newspapers amid COVID-19 fallout


Postmedia Network Inc. will lay off about 80 employees and permanently close 15 community publications as the newspaper conglomerate navigates the financial fallout of COVID-19.

"Our business, like so many, has been hard hit by the freeze imposed across the Canadian economy and around the world," wrote CEO Andrew MacLeod Tuesday in a memo to staff obtained by The Canadian Press.

The print and digital advertising revenue impact of the crisis "has been very significant," he said.

"I believe Postmedia has taken every possible short-term step to stabilize our business against these unprecedented tidal forces."

The company is "fully utilizing every government subsidy announced," but more must be done to weather the industry's "huge declines" in revenue.

Postmedia will shutter 15 community newspapers in Manitoba and Ontario's Windsor-Essex area for good, the memo says, calling the publications "not financially sustainable."

Final print editions will run the week of May 4, wrote Phyllise Gelfand, vice president of communications in an email.

The affected publications include Manitoba's Altona Red River Valley Echo, Carman Valley Leader, Gimli Interlake Spectator, Morden Times, Selkirk Journal, Stonewall Argus & Teulon Times, Winkler Times and The Prairie Farmer, which leaves Portage La Prairie as the company's remaining community presence in the province. 

In Ontario, the closures include the Kingsville Reporter, Lakeshore News (Windsor-Essex), LaSalle Post, Napanee Guide, Paris Star, Tecumseh Shoreline Week, Tilbury Times.

Final print editions will run the week of May 4.

The company says websites will remain for the Napanee Guide and Paris Star.

"Shutting down a publication is never our first choice," she wrote. "These are low-circulation publications, all but two of them free weeklies, and were not profitable."

The company owns nine community publications in Manitoba, according to its website, and dozens across Ontario.

It will also shut down Town Media Events, a group that produced consumer events such as the Gourmet Food and Wine Expo.

About 30 people will lose their jobs as a result of the permanent closures.

An additional roughly 50 people in the company's sales and sales operations teams will be laid off for three months, after which Postmedia will re-evaluate the decision, said MacLeod. The temporarily laid off workers can access the Canada Emergency Response Benefit — that provides up to $500 weekly for many of those who have lost their jobs due to the pandemic — and receive company benefits.

Remaining staff who earn $60,000 or more, except commissioned advertising sales representatives, will receive a salary reduction for at least three months, MacLeod said. The pay cuts will be re-evaluated after three months.

The president and CEO — MacLeod — will take the steepest pay cut at 30 per cent, according to the memo. His pay reduction, which took effect April 1, was announced previously and Gelfand said it will be in place for the foreseeable future.

Executive vice-presidents will lose 20 per cent of their pay, senior vice presidents 17.5 per cent, directors 10 per cent, and managers and supervisors eight per cent. Remaining staff will see a five per cent drop, though the memo notes these cuts will be capped so no one falls below $60,000 annually.

"Team, these decisions are the most difficult and are only taken after all other options have been explored," said MacLeod.

"These are difficult but necessary decisions to make. These measures are all focused on putting our company in the best possible position to emerge from the current crisis and move ahead on our strategy," added Gelfand.

The company is not alone in struggling with declining advertising revenue during the pandemic.

Torstar Corp., which owns the Toronto Star and other papers, laid off 85 employees recently, including 11 editorial positions at community newspapers. Some senior management and the board of directors will receive 20 per cent less compensation.

Some Winnipeg Free Press workers agreed to a temporary pay cut earlier this month.

This report by The Canadian Press was first published April 28, 2020.

— Torstar holds an investment in The Canadian Press as part of a joint agreement with subsidiaries of the Globe and Mail and Montreal's La Presse.

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

Aleksandra Sagan, The Canadian Press

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