Godfrey writes that Postmedia has not yet reached its salary cost reduction targets.

The following memo was sent to Postmedia staff on Jan. 12, 2017 from Paul Godfrey, president and CEO.

Today we announced our Company’s financial results for the first quarter of our 2017 fiscal year – September to November 2016. You can view the full details of the quarterly results at Postmedia Link or www.postmedia.com.

Revenue for the quarter was $214.9 million as compared to $251.1 million in the prior year, a decrease of $36.2 million (14.4%). The revenue decline was primarily due to decreases in print advertising revenue of $31.1 million (21.9%) and print circulation revenue of $6.1 million (9.0%). Digital revenue increased by $1.2 million (4.1%) in the quarter.

Total operating expenses excluding depreciation, amortization, impairment and restructuring decreased $15.5 million (7.4%) for the quarter, relative to the same period in the prior year. The decrease was primarily related to our cost reduction initiatives.

A promising sign this quarter was the uptick we saw in digital revenue. Some of our newer forays – including digital marketing services (DMS) – are bearing fruit and we are optimistic about our products and services and the dedicated teams selling these new opportunities to new clients. We’ve seen tremendous growth in our DMS client roster and Postmedia was recently named the winner of the North America Google Channel Award for Strategic Account Growth recognizing exceptional success in bringing Search Engine Marketing solutions to customers across Canada.

Across our brands we continue to develop exceptional and real content in a time when there is growing concern about “fake” news. We reach 64% of Canadian adults monthly – approximately 18.6 million people engage with our newspapers, digital and mobile sites.

And while we see encouraging signs from our newer efforts we continue to see steep declines from traditional revenues. As we move forward we must remain concentrated on accelerating the reduction of operating costs, divesting of non-core assets including real estate properties across Canada, and as we announced last quarter, salary cost reductions.

We received significant interest in the voluntary buyout program announced last quarter. People from across our operations and from every level decided it was the right time to move on and by now everyone who applied for the program has heard back. We have not yet reached our salary cost reduction target and with the revenue declinations we face we must continue to redesign what we do and how we structure our teams.

We talk a lot about transformation but it has become the continuous reality for our industry and our company. The hard work of that transformation happens across our company every day. On behalf of Postmedia’s Board and senior management thank you to everyone transforming Postmedia into a future-focused media company.