TORONTO - Cost pressures and plunging share prices prompted Canadian publisher and broadcaster CanWest Global Communications Corp. to cut 560 jobs -- about five per cent of its workforce -- Wednesday as the company faces a rougher economy and more competition.

The company, which employs about 10,500 people in Canada, said the cuts would save $61 million a year.

"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," CEO Leonard Asper said in a statement.

"It will not impact our strategy to invest in growth media like digital online, mobile and specialty channels."

The cuts will be made through voluntary buyouts, attrition and layoffs and come on top of several hundred jobs that have been eliminated over the last two years, CanWest said.

Shares in the Winnipeg-based company fell nearly seven per cent on the Toronto Stock Exchange to 85 cents Wednesday, a drop of close to 90 per cent this year alone.

CanWest's more narrowly traded A shares in the company's dual share structure dropped 25 cents to 90 cents, a decline of 22 per cent, also well off the high of about $7.30 11 months ago.

The company, once worth billions, now has a stock market value of about $85 million.

One analyst from a major Toronto bank said CanWest needed to make "some pretty significant cost-cutting measures" in light of its "tough" balance sheet. The company has piled up several billions of dollars in debt to finance past acquisitions and has expanded its broadcasting operations abroad.

"They own assets that obviously don't have a lot of growth attached to them -- they're cyclical in terms of advertising spending," said the analyst speaking on condition he not be identified.

"You couple that with a pretty heavily indebted balance sheet, and the equity market in this type of environment does not like that combination."

At the same time, the analyst said, the company is operating its assets "really well" in light of the stiff financial headwinds.

CanWest is due to review its fiscal fourth-quarter results Friday.

In its third quarter, the company reported a $28.4 million loss, as debt costs and one-time charges outweighed a 15 per cent jump in revenues.

In its news release, the Winnipeg company said about 210 jobs will be cut at through a restructuring of news operations at CanWest Broadcasting's E! stations.

CanWest Publishing, which operates the former Southam chain and other papers, will see about 350 positions disappear through a restructuring of the community newspaper group. The company will also cut the physical size of some newspapers to reduce costs and focus efforts on expanding digital media operations.

Asper said the money-losing National Post daily will try to focus on its profitable markets and reduce deeply discounted circulation in a bid to turn a profit.

The cuts were needed to "enable CanWest to maintain its strength, build market position and be ready at the first sign of an economic recovery," Asper said.

In Victoria, where 18 people, including on-air personnel, were being let go at CHEK-TV, stunned employees learned the news at a lunch-hour meeting.

Peter Murdoch, of the Communications, Energy and Paperworkers Union of Canada, criticized "the binge of acquisitions" for the company's financial troubles.

After spending more than $3 billion to buy the Southam big-city chain and other assets from Conrad Black's Hollinger group in 2001, the company struck a $2.3 billion debt-laden deal to buy broadcaster Alliance Atlantis and its stable of specialty TV stations two years ago.

Those deals loaded up the CanWest balance sheet with large debt and put financial pressures on the company.

"Canada's largest media company is trading at a penny-stock level with incredible debt obligations," Murdoch said.

"What is paying the price here is not only employees but Canadian consumers."

Meanwhile, the union representing employees at five CanWest dailies said it's concerned the cut of 350 newspaper jobs will compromise editorial quality and send the papers into a downward spiral.

"We don't yet have any details on which jobs will be cut," said Arnold Amber, director of CWA Canada, a unit of the Communications Workers of America. "But you can't get rid of 350 newspaper jobs and not affect editorial quality. This is bad news for employees and

bad news for newspaper readers."

The union represents employees at the Montreal Gazette, the Ottawa Citizen, the Regina Leader Post, the Windsor Star and the Victoria Times Colonist.

Controlled by the Asper family, CanWest is an international media company with interests in television, newspapers and the Internet in Canada, Australia, New Zealand, Indonesia, Malaysia, Singapore, Turkey, U.K and U.S.

Among other properties, it owns the Global television network and the Post as well as several big-city newspapers from Vancouver to Montreal.

Asper expressed frustration with last month's federal regulatory decision rejecting the request of broadcasters such as Global to let them charge cable and satellite distributors for carrying their channels.

The CRTC said conventional networks had failed to prove they have enough economic need for the higher revenues, which would have been worth about $300 million year to the big broadcasters.

"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," Asper said Wednesday.

"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."

Also last month, CanWest reported a 10 per cent drop in operating earnings at its Australian operations.

CanWest has seen its ad revenues under pressure from the slumping economy, especially in Ontario, Quebec and Western Canada, where the media company has major newspapers in Montreal, Toronto, Vancouver, Edmonton and Calgary.

Its conventional broadcast operation, Global TV, has also come under competitive pressures from rival broadcasters and specialty channels.