Canwest says cuts won’t affect digital and specialty growth
CEO Leonard Asper blames a recent CRTC ruling as broad cuts send 5% of the workforce to the door. The axe comes down on news departments while stock continues to slide.
On Wednesday, Canwest Global Communications announced it will chop 560 jobs, or 5% of its workforce, as part of a drive to eliminate $61 million in annual operating costs.
The cuts, coming at both Canwest’s broadcast and newspaper operations, will be achieved over an unspecified time via employee buyouts, attrition and reductions. They also come as Canwest gets set to release its fourth-quarter earnings on Friday.
On the publishing side, Canwest will cut 350 positions to achieve savings of between $25 million and $30 million. That restructuring move will produce an accounting charge of between $18 million and $22 million in fiscal 2009.
The news divisions at Canwest’s E! stations will be restructured to cut 210 positions and reduce annual operating expenses by around $17 million. The broadcaster said it will cut positions across all departments, including production and content, to achieve total annual cost savings of $21 million.
‘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,’ Leonard Asper, president and CEO at Canwest, said in a statement.
The CEO blamed in part the CRTC for the deep job cuts, suggesting the move was forced by a recent decision by the regulator to deny the broadcaster subscriber fees from cable and satellite TV operators for its over-the-air signals.
Asper said the company had made earlier cost-cutting moves. ‘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 argued.
Asper insisted that cutting deeply into its workforce will not affect Canwest’s ability to grow its digital online, mobile and specialty channels.
Peter Murdoch, VP of media for the Communications, Energy and Paperworkers Union of Canada, which represents Canwest employees across Canada, was less certain. He warned of more job cuts to come at Canada’s largest media group as it comes to terms with a stock in penny territory and a need to bring down a crippling $3.7-billion debt load. ‘Stations across the country have seen news division cuts, local programming has been cut and commercial production has been cut,’ Murdoch said, surveying the carnage Wednesday. Canwest staff were told of the job cuts at a series of staff meetings on Wednesday afternoon.
The cuts to E!’s regional news division follow Quebec broadcaster TQS gutting its news-gathering operation to remain in business. They also follow Global Television’s elimination one year ago of 200 jobs across Canada and its Quebec City and Sherbrooke, QC news bureaus, as it centralized its news-gathering operation in four digital broadcast centres.
It is also understood that post-production facilities at Canwest’s Toronto production centre will be eliminated, and are likely to be outsourced.
A recent slide in the value of Canwest shares intensified Wednesday. Company stock fell 7% on the Toronto Stock Exchange to $0.84. That’s well down from a 52-week high of $8.28.
From Playback Daily