Transcontinental Eliminating Jobs
Transcontinental is eliminating 1,500 jobs and taking substantive cost-cutting measures throughout Canada, the United States, and Mexico.
In recent weeks the rapid deterioration of the economy has reduced the communication and marketing investments of a number of Transcontinental's customers, significantly affecting some of the corporation's business niches. Commercial printing projects, direct mail projects, and magazine advertising placements have been cancelled or postponed by companies that have been hit by the recession.
"It's a difficult situation for everyone affected, but we are acting in the interests of all of our employees and our shareholders," said François Olivier, president and CEO of Transcontinental. "In the short term, this rationalization comes at a cost, but in the medium term it will protect the corporation's financial health." Due to the economic downturn caused by the financial crisis, in November 2008 the corporation announced that it was consolidating the operations of Transcontinental Direct USA Inc., its U.S. subsidiary. This consolidation, along with a company-wide review of production capacity, the adjustment of costs to demand, the closure of plants, and the termination of some publications involves the elimination of 1,500 jobs. The employees affected by the cuts will be entitled to severance packages and professional career counselling services.
In addition, as part of the rationalization measures, all of Transcontinental's employees are being asked to do their share. A number of extraordinary initiatives in light of the situations and specific needs of each business group have been implemented. Each budget item and each new project has been reviewed. A hiring freeze has been implemented. Unpaid leave, reduced work weeks, and other measures are also being implemented.
For their part, the corporation's senior managers have decided to take two weeks of unpaid leave but to work throughout that period. In total, these measures will cut costs by about $75 million on an annualized basis, including $50 million in 2009. Capital investments, except for those assigned to outsourced newspaper printing, have been reduced.
"We plan to maintain our prudent balance between our profits, costs, debt and investments," said Olivier.
In fiscal 2009, Transcontinental plans to continue its transformation by expanding its service offering on the Internet, integrating new marketing services and creating new communication platforms. This transformation will take place along with the development of its core activities as a publisher and printer.
