Postmedia to shed 20% of salary expenses

Postmedia Network Canada Corp., which just completed a debt restructuring transaction, wants to cut its salary expenses by 20 per cent through voluntary buyouts, though layoffs are possible if the target isn’t met.

The buyout offer comes as Postmedia reported a net loss of $99.4 million, or 35 cents per diluted share, in the fourth-quarter ended Aug. 31, compared with a $54.1-million net loss, or 19 cents per diluted share, in the same period a year earlier.

For the year ending Aug. 31, the company reported a net loss of $352.5 million, compared with $263.4 million in the prior year.

The company has about 4,000 employees working for 200 brands and publications across the country in big cities and small communities. It includes daily newspapers such as the National Post, Ottawa Citizen, Edmonton Journal as well as the Sun newspaper chain, acquired from Quebecor in 2015.

“The reductions will come from all levels and operations across Postmedia,” said president and CEO Paul Godfrey on a conference call on Thursday.

In its financial filings, the company reported total compensation expenses of $361 million in fiscal year 2016.

In a Thursday memo to staff, Godfrey acknowledged it will be tough to say goodbye to colleagues and friends in the coming weeks, but called it “a necessary step for our survival.”

He added: “We need to be a leaner, fitter and faster business so that we can survive in a rapidly evolving marketplace — one that has evolved at a lightning pace.”

In July 2015, the company announced it would aim to cut costs by $50 million by the end of fiscal 2017, and then amended the target to $80 million in net annualized cost savings, by the end of the first quarter of fiscal 2017.

The company said it has implemented $75 million in net annualized cost savings since the program began.