Reduces annualized operating expenses by approximately $61 million
WINNIPEG, Nov. 12 /CNW/ - Canwest Global Communications Corp. ("Canwest"
or the "Company") today announced initiatives that are expected to reduce
annualized operating costs by approximately $61 million.
These changes will include the reduction of approximately 560 job
positions or about five per cent of the Company's workforce through voluntary
buyouts, attrition and reductions. These reductions are in addition to several
hundred jobs that have been eliminated over the last two years.
These actions are a result of the current economic environment as well as
the structural challenges in the conventional television model. They also
reflect Canwest's ongoing review of work processes to achieve maximum
operating efficiencies, and its transformation into a multi-platform media
company that is building its audience using digital media.
"Having completed an assessment of our Canadian operations and, after
careful consideration, we are implementing a number of initiatives that will
provide savings that will allow us to better compete in the current economic
environment, without compromising our core products and services," said
Leonard Asper, President and CEO, Canwest. "It will not impact our strategy to
invest in growth media like digital online, mobile and specialty channels."
Mr. Asper added: "Previous initiatives including the Canwest News
Service, Digital Newsrooms and synergies achieved through the integration of
the former Alliance Atlantis specialty channels have helped us manage costs
and reduce our workforce. However, the current environment requires that we go
further - especially in light of the CRTC's failure to adequately recognize
the structural issues facing conventional broadcasters. Although it was a very
difficult decision to implement staff reductions, we believe that these
actions are required to enable Canwest to maintain its strength, build market
position and be ready at the first sign of an economic recovery."
A series of initiatives, including the restructuring of its news
operations at E! stations, will result in Canwest Broadcasting reducing its
workforce by approximately 210 positions and reduce operating expenses
(excluding program costs) by approximately $17 million from fiscal 2008
levels. The restructuring initiatives are aimed at reducing infrastructure
costs without impacting audience access to local programming and ensuring the
Company can continue to satisfy its licence conditions. These initiatives are
expected to result in restructuring costs of approximately $7 million in
Certain activities non-core to the broadcasting business will be
eliminated and other operational efficiencies will be achieved through
elimination of positions across all departments. Total annualized savings to
2008 expenditures are expected to be approximately $21 million.
A series of initiatives in Canwest Publishing will eliminate
approximately 350 positions and is expected to reduce operating costs in
fiscal 2009 by between $25 million and $30 million. The unit is expected to
incur restructuring costs of between $18 million and $22 million in fiscal
These initiatives include a restructuring of the community newspaper
group, a streamlining of some production processes and web width reduction in
certain Canwest newspapers. The National Post will also institute changes to
accelerate its road to profitability by focusing on its profitable markets,
reducing unproductive and deeply discounted circulation and utilize new
technology that enables it to better target key high value readers while
increasing web engagement with its brands. In total, these initiatives are
expected to reduce costs on an annualized basis by between $35 million and $40
The development and creation of news and information will not be impacted
by the changes. Canwest remains committed to being Canada's premier news
gathering organization combining the strength of local reporters and the reach
of the Canwest News Service.
Mr. Asper said some changes had been planned but were accelerated because
of the economic slowdown while other initiatives were identified through a
workflow review that has been undertaken within every division over the past
In addition to Canwest's ongoing strategies of strengthening the balance
sheet, the Company is also continuing to improve the performance of its core
business which has resulted in improved ratings in conventional television as
well as market-leading positions in its newspaper and specialty channels. The
Company will also continue to invest in the areas that provide the greatest
long-term growth including:
- Internet video streaming agreements that make more than 50 hit
programs accessible online anytime.
- A Video on Demand (VOD) agreement that provides access to more than
60 hours of people's favourite first-run Global and E! programs. This
expands Canwest's VOD offering to four categories.
- New online partnerships including Gasbuddy.com and Clubzone.com that
will increase traffic to the Canada.com site by 25%.
- The continued expansion of Canwest News Services and Canwest
Editorial Services' client base and service offerings.
- The introduction of new specialty channels in 2009 to further
capitalize on this growing segment where the Company is a recognized
"In these uncertain economic conditions we remain focused on
strengthening our balance sheet, protecting and exacting better performance
from our core assets and investing in growth media that responds to the
evolving habits and expectations of consumers, advertisers and distributors,"
Mr. Asper said. "While we anticipate that advertising revenues will be
negatively affected by the current economic slowdown, Canwest's diversified
revenue base and strong fiscal management will see it though this period and
management remains dedicated to taking the necessary steps to provide the
Company with the flexibility required over the longer-term while building for
Forward Looking Statements:
This news release contains certain forward-looking statements about the
objectives, strategies, financial conditions, results of operations and
businesses of Canwest Global Communications Corp. Statements that are not
historical facts are forward-looking and are subject to important risks,
uncertainties and assumptions. These statements are based on our current
expectations about our business and the markets in which we operate, and upon
various estimates and assumptions. The results or events predicted in these
forward-looking statements may differ materially from actual results or events
if known or unknown risks, trends or uncertainties affect our business, or if
our estimates or assumptions turn out to be inaccurate. As a result, there is
no assurance that the circumstances described in any forward-looking statement
will materialize. Significant and reasonably foreseeable factors that could
cause our results to differ materially from our current expectations are
discussed in the section entitled "Risk Factors" contained in our Annual
Information Form for the year ended August 31, 2007 dated November 20, 2007
filed by Canwest Global Communications Corp. with the Canadian securities
commissions (available on SEDAR at www.sedar.com ), as updated in our most
recent Management's Discussion and Analysis for the three and nine months
ended May 31, 2008. We disclaim any intention or obligation to update any
forward-looking statement even if new information becomes available, as a
result of future events or for any other reason.
About Canwest Global Communications Corp.
Canwest Global Communications Corp. (www.canwest.com), (TSX: CGS and
CGS.A,) an international media company, is Canada's largest media company. In
addition to owning the Global Television Network, Canwest is Canada's largest
publisher of English language daily newspapers and owns, operates and/or holds
substantial interests in conventional television, out-of-home advertising,
specialty cable channels, web sites and radio stations and networks in Canada,
New Zealand, Australia, Turkey, Indonesia, Singapore, the United Kingdom and
the United States.
For further information:
For further information: Media Contact: John Douglas, Vice President,
Public Affairs, Tel: (204) 953-7737, firstname.lastname@example.org; Investor Contact:
Hugh Harley, Director, Investor Relations, Tel: (204) 953-7731,