Transcontinental Announces Another 250 Job Cuts After $144.3 Million Loss
Montreal-based printer and newspaper publisher Transcontinental Inc. announced yesterday that it will be cutting another 250 jobs in addition to the 1,500 positions eliminated in a major restructuring announced back in February. The company also said it posted a $144.3 million loss for the second quarter of this year as a result of the restructuring and other charges.
Still, Transcontinental President and CEO Francis Olivier remains upbeat despite the sizable loss, noting that the 1,750 positions being eliminated this year (about 13 percent of the company's workforce) will translate into about $100 million in annual savings.
"In the current context, excluding unusual items, these are encouraging results that show an improvement over the first quarter,” said Olivier. “We reacted quickly and adjusted our production capacity and costs to the demand in each of our markets. … After three quarters of adjustment and refocusing, and assuming no further deterioration in the present economic situation and the execution of our rationalization plan, we are confident that our profitability will continue to improve in coming quarters."
Adjusted operating income before amortization for the second quarter was down 10 percent compared to a decline of 29 percent in the first quarter.
"The year 2009 will be one of transition for Transcontinental and we will come out of it stronger and better positioned in each of our markets to take advantage of the economic recovery," Olivier said.
He added that Transcontinental's U.S.-based direct mail operations "by far have been hit the hardest, with their revenues down by about 50 percent in the second quarter compared to 30 percent in the first quarter."
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