MONTREAL -- Quebecor Inc. is cutting some 500 jobs at its Sun Media newspaper division in a move that includes the closure of two production facilities in Ottawa and Kingston.
The downsizing, representing about a third of Sun Media's unionized workforce, is part of the Montreal-based media group's efforts to reduce annual costs by $45 million.
There had been earlier reports Quebecor (TSX:QBR.B) would eliminate the position of publisher at some newspapers.
Quebecor's president and CEO, Pierre Karl Peladeau, says the restructuring is warranted by changes in the newspaper industry.
"With the recent announcement of a major strategic redesign of Sun Media's organizational structure, the restructuring further streamlines and optimizes the organization's operations," he said in a release Tuesday.
"By doing so, Sun Media Corporation is proactively leading the way to ensure long term success."
It remains committed to its publications, which include the Toronto Sun and other dailies across Canada under the Sun and other banners, Peladeau added.
A representative for Sun Media declined to provide any additional details.
Sun Media has 36 paid-circulation daily newspapers and six free daily newspapers as well as almost 200 community newspapers, shopping guides and other specialty publications. It also provides commercial printing and related services as well as distribution for newspapers, flyers and magazines.
"Clearly, this is a blow to journalism in Canada," said Paul Morse, head of the Southern Ontario Newsmedia Guild, which represents some of Sun Media's employees.
"The erosion of these kinds of jobs is significant problem for newspapers that are going to be dealing with trying to put out quality journalism with workforces that are clearly stretched beyond the limit.
"This is a terrible day for journalism in Canada."
Quebecor said the "innovative plan will streamline decision-making and operational structures in order to achieve greater efficiency in all activities, from the editorial to the industrial operations."
"Sun Media Corporation is also planning to redesign its sales activities to strengthen its business strategy. At a time of negative growth in the industry, maintaining reasonable cost-effectiveness is essential," the company said.
The Montreal-based media and telecom company, which also owns the Videotron cable and phone business and the TVA television network in Quebec, reported Tuesday it had $18.6 million or 30 cents per share of net income attributable to shareholders in the third quarter.
That's down about 29 per cent from $26.1 million or 41 cents a year ago.
On the other hand, Quebecor's adjusted income from continuing operations rose to $52.1 million or 83 cents per share -- nine cents a share above the consensus estimated compiled by Thomson Reuters.
The adjusted income was up from $40 million or 63 cents per share in the third quarter of 2011.
Quebecor's third-quarter revenue also improved slightly, rising about $45 million to nearly $1.06 billion -- up from $1.01 billion a year earlier.
"The corporation continued its growth in the third quarter of 2012 despite a fiercely competitive business environment in most of its lines of business," Peladeau said.
"It increased its revenues by 4.4 per cent, its operating income by 10.4 per cent and its adjusted income from continuing operations by 30.2 per cent, confirming the profitability of the major investments made in recent years."
