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Montreal, February 18, 2009 – Transcontinental today
announced major rationalization measures to address the recession.
Some 1500 jobs are eliminated and substantive cost-cutting
measures are being implemented 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 Chief Executive Officer 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 1500 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 Mr. Olivier.
Reinventing Transcontinental
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.
As François Olivier pointed out, Transcontinental
is in an enviable position for maximizing its growth: “We
have the customer base, and we already provide those customers
with a major portion of their marketing tools. We have the
necessary assets and organizational capacities. We have the
strategy, the values, the people and the financial solidity
to get through the economic crisis and come out of it in a
stronger position for growth.”
About Transcontinental
Transcontinental provides printing, publishing and
marketing services that deliver exceptional value to its clients
and provide a unique, integrated platform for them to reach
and retain their target audiences. Transcontinental is the
largest printer in Canada and sixth-largest in North America.
It is also the country’s leading publisher of consumer
magazines and French-language educational resources, its second-largest
community newspaper publisher, and its digital platform delivers
unique content through more than 120 Web sites. Its Marketing
Communications Sector provides advertising services and marketing
products using new communications platforms supported by database
analytics, premedia, email marketing, and custom communications.
Transcontinental is a growing company with a culture of continuous
improvement and financial discipline, whose values, including
respect, innovation and integrity, are central to its operation.
Transcontinental (TSX: TCL.A, TCL.B) operates in Canada, the
United States and Mexico, and reported revenues of C$2.4 billion
in 2008. For more information about the Corporation, please
visit www.transcontinental.com.
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For information:
Media
Nessa Prendergast
Director, Media Relations
Transcontinental Inc.
Telephone: (514) 954 2809
nessa.prendergast@transcontinental.ca
Financial Community
Jennifer F. McCaughey
Director, Investor Relations
Transcontinental Inc.
Telephone: (514) 954 2821
jennifer.mccaughey@transcontinental.ca
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