Source: Globe and Mail

When Pierre Karl Péladeau stepped in as head of Sun Media Corp. last month, it was evident a major restructuring of Quebecor Inc.'s newspaper division was at hand.

With Quebecor otherwise consumed by its expansion into the cellphone market, such direct attention from the parent company's chief executive officer was unusual.

His first move came yesterday when Quebecor announced 600 layoffs across the Sun Media operations, which comprise 43 newspapers, including the Sun tabloid chain and dozens of titles in Ontario and Quebec. The cuts will reduce the division's work force by 10 per cent. The company did not say how much it will save.

It is the second round of cutbacks at the company in two years, and may precede a broader shift at Sun Media to drive content online and save newsprint costs. The move comes as Quebecor's competitors, including CanWest Global Communications Corp. and CTVglobemedia Inc., have cut jobs in the face of an economic slowdown that is causing ad revenues to dry up.

"The speed at which the current economic environment is deteriorating forces us to make difficult decisions at this time of year," Mr. Péladeau said in a statement. The cuts were spread across the company and included management.

"The cuts are broad and they are deep," said Brad Honywill, president of the Communications, Energy and Paperworkers Union local that represents staff at the Toronto Sun. The flagship paper in the Sun chain was affected most with 27 full- and part-time jobs cut, he said.

Quebecor made $45-million in the past quarter, but most of the profit came from the cable subsidiary, Vidéotron, Mr. Péladeau said recently.

The Sun Media shakeup comes amid other sector changes, including a management shuffle at Torstar Corp., owner of the Toronto Star. Editor-in-chief Fred Kuntz is leaving at year's end, a move that comes a few weeks after former CBC executive John Cruickshank was named publisher.

Concerns about a prolonged advertising slump loom over the industry. A survey of 422 newspaper executives in Canada and the U.S. by Toronto-based Kubas Consultants indicates all major categories of advertising are expected to decline next year.

The deepest drop could come in employment classifieds, falling 16 per cent, the survey projects. The only exception is online advertising, which is forecast to rise more than 13 per cent. The survey notes increases in online revenues will not make up for drops in other categories.

© Globe and Mail