Reeling from huge Q2 loss, Transcon cuts another 250 jobs

Quickly in the wake of a major second quarter loss announced at start of business Thursday, Transcontinental Inc. announced that it was cutting an additional 250 jobs across the company, according to a story by Canadian Press. This is on top of some 1,500 job cuts announced earlier this year and will mean that Transcon will have cut 13% of its workforce, thereby saving $100 million annually.

"While this rationalization plan comes at significant cost, when completed it will protect the corporation's financial health," Olivier said in a conference call with analysts after markets closed Thursday.

Olivier said second quarter direct mail revenues had dropped by 50% and that the company's magazine and newspaper printing business had taken a major hit in national and local advertising, particularly the automotive sector.

"Organic growth generated in our educational book publishing and distribution activities were more than offset by a reduction in national advertising and consumer and business magazine publishing activities, and to a lesser extend local advertising from community newspapers," Olivier said.

The company said it expected to benefit from new contracts to print all the magazines of Rogers Communications Inc. as well as the San Francisco Chronicle. It is negotiating with other Bay area newspaper publishers to share in the efficienies of using the same Transcon plant.