Restructuring to save Canadian media group Torstar $12 million annually

13 May 2008

Torstar Corp, the owner of Canada's largest-circulation daily Toronto Star, has announced its intention to cut 160 jobs in a restructuring prompted by continuing weakness in the newspaper industry. This was its second job cut in two years, after shedding 85 positions from its workforce in 2006.

The company said its decision would result in a one-time restructuring charge of about $21 million in the first quarter, although it expects to save $12 million annually as a result of this exercise. A spokesperson for Torstar said there are approximately 6,200 employees at its newspaper division and that the staff reductions cut across almost every area of the unit.

The company said the cuts would include voluntary and involuntary staff reductions. A company spokesman said 122 employees at the firm's flagship newspaper, the Toronto Star, are leaving voluntarily. The newspaper has around 1,800 people on its rolls and a daily readership of 436,000.

Torstar's decision comes during a difficult environment for newspapers as many readers turn to the internet and away from print publications. However, strangely, the 10 employees at the internet production staff at Torstar Electronic Publishing were also laid off.

The company countered charges of neglecting its online business by saying that the affected positions are redundant support jobs and many of the functions have been transferred over time to the editorial department.

"We've made the decision to better align existing resources and reduce duplication of efforts," said Robert Hepburn, spokesman for the Toronto Star. "Part of the Star's strategy is to aggressively embrace the opportunities provided by the internet," he said, adding the Star has recently hired more editorial staff for its various online services, including three new vertical content sites that were recently launched this week.