Torstar laying off more than 300 production and editorial employees

In this May 7, 2014 file photo, president and CEO of Torstar David Holland speaks to shareholders at their annual general meeting in Toronto. (Aaron Vincent Elkaim / THE CANADIAN PRESS)

TORONTO -- The company that owns Canada's largest circulation newspaper, the Toronto Star, is laying off more than 300 production and editorial employees in the latest downsizing move in the hard-hit industry.

The bulk of the job losses come from a plan by Torstar (TSX:TS.B) to sell its Toronto-area printing plant and outsource the work to Transcontinental (TSX:TCL.A), the country's largest commercial printing company.

The printing plant job losses include 220 full-time employees and 65 part-timers, Bob Hepburn, the Star's director for communications, said Friday. These workers will meet with their union next week to work out termination agreements.

Also Friday, 12 temporary contract employees in the Toronto Star newsroom had their contracts ended early, Hepburn said. Most worked in the Star's tablet division.

The Star hired about 70 to 80 people, mostly on short-term contracts, for the launch of its daily tablet-based publication called Star Touch.

"We found that the launch has gone quite smoothly and the production is better, so ... we're ending those contracts earlier than originally scheduled," he said.

One permanent part-time employee was also laid off, Hepburn said.

Paul Morse, president of Unifor Local 87-M, which represents newsroom employees at the Star, said the company is also eliminating 21 positions in the circulation department. Those employees will stop working later this year and their positions will be contracted out, he said.

Hepburn later confirmed the additional layoffs, but said only 15 positions will be considered for outsourcing.

The company also announced a new voluntary severance program in a memo to its newsroom employees obtained by The Canadian Press. Employees will receive details of the program on Monday, editor Michael Cooke said in an email.

The switch to Transcontinental is expected to begin in July and produce about $10 million of annual savings for Torstar.

The company is also looking for a buyer for its printing plant and land in Vaughan, just north of Toronto. Printing of Torstar's papers will still be done in Vaughan, but at Transcontinental's plant there.

Torstar's flagship Toronto Star newspaper has begun negotiating with its unions towards a transition.

"Transcontinental Printing has newer, more modern presses and this decision will result in our very loyal print readers and subscribers receiving a high-quality print product with enhanced reproduction," Toronto Star publisher John Cruickshank said in a statement Friday.

"This is an important step for the Toronto Star, but unfortunately it also means we will be saying goodbye to our long-time Vaughan printing plant employees."

The newspaper's parent company, Torstar Corp., says it expects to record about $22 million in restructuring charges this year.

The global newspaper industry's transition away from print towards online publishing has been accelerating after years of more gradual change.

The Toronto Star launched its Star Touch tablet app last year.

It is modelled after a similar platform pioneered by Montreal-based La Presse, which stopped printing weekday editions at the end of December.

Transcontinental is both a newspaper and flyer printer as well as a newspaper publisher that has also been adapting to changing market conditions resulting from the switch to digital media.

The president of its printing and packaging division, Brian Reid, said in a separate statement from Montreal that the Torstar deal is positive for both companies.

"This agreement further demonstrates the ongoing interest in our ability to help publishers across Canada become more efficient. This contract will also enable TC Transcontinental Printing to further optimize its capacity utilization at Transcontinental Vaughan."