The following memo was sent to staff on May 27 from Postmedia CEO Andrew MacLeod.
It was four weeks ago that we announced a number of cost savings measures aimed at mitigating the severe revenue declines the COVID-19 crisis has had on our business. Like countless businesses across this country, Postmedia is navigating a global pandemic that has affected the Canadian economy to its core.
To give everyone perspective, Postmedia has qualified for government subsidies because our overall revenues are down more than 30%. That is a gut wrenching drop and the subsidies, while welcome, don’t come close to mitigating these declines. At the same time we should remind ourselves (and be grateful) that some industries’ revenues are down 80%, 90% or even 100%.
As a management team, we’ve been extremely focused on ensuring the short-mid and long term stability of Postmedia during this unprecedented time. This has included preserving liquidity, constraining costs, maximizing revenue and pursuing government support. Recently, our cost savings measures included broad based temporary salary reductions, some targeted closures and unfortunately, layoffs.
In our unionized operations, collective agreements vary across the country with respect to changes that can be implemented. For any measure, like for example a temporary salary reduction, not expressly contemplated in a collective agreement (and there are 43 collective agreements across the company), management and union leaders must negotiate and then union leaders choose what options they present to their members. Union members may or may not have the opportunity to vote on management proposals. We fully respect this process and our union stakeholders.
Unfortunately, our request for a temporary salary reduction was not supported by the unions and we were unable to find mutually agreeable common ground on alternative cost reduction measures. Given the scale of the crisis, and the unprecedented level of revenue declines, it was very important to me that the burden of cost containment be shared fairly across the company. As such we are necessarily moving forward with approximately 40 permanent reductions in accordance with the terms of our collective bargaining agreements.
Across the country, all of you are working incredibly hard under very challenging circumstances. Please know that all of the steps we take are in an effort to ensure Postmedia can weather a crisis of unknown length and severity. We, like so many are playing defence and every decision we make is taken to ensure we emerge from this crisis and adapt to whatever our ‘new normal’ is in terms of Canada’s economic recovery.
We are very grateful to everyone across Postmedia for pulling together and supporting our audiences, clients and most importantly, each other.