Layoff notices were handed out at Rogers Media Inc. on Tuesday as the company tries to retool its media properties amid declining advertising revenue.
The cuts affected 94 people (or two per cent of the media division's workforce), and were distributed across Rogers Communication Inc.'s sprawling media division that includes some of the largest magazines in the country, the City and Omni television networks, 55 radio stations and speciality channels such as Sportsnet and FX Canada.
In a memo to employees, president Keith Pelley said that Rogers Media is evolving its business to adapt to changes in the media industry. "Today we made changes to our business that will allow us to continue to make investments in our priority brands and strategic growth initiatives, and better position us for the future… Decisions like these are never easy, but are necessary."
The media division's operating profit was slightly higher in the most recent quarter compared to a year ago, the company said late last month. While the magazine division – which publishes titles such as Maclean's and Chatelaine – continued to struggle overall, Rogers Media saw "revenue growth at Sportsnet, higher attendance at Toronto Blue Jays games and higher sales at The Shopping Channel."
The cuts come after another 62 workers lost their jobs in May, when Rogers pulled the plug on its short-lived CityNews television channel and decided to stop producing programming for Omni in Alberta.
"We've seen a slight overall improvement in the advertising market and are cautiously optimistic," chief financial officer Anthony Staffieri said in a conference call late last month. "There's no doubt there has been a systematic shift in how advertising dollars are allocated, underscoring the importance of a growing subscription revenues and continued investments in our digital platforms."
Nowhere has that been more evident than at its publishing division. Like publishers across North America, Rogers has seen print revenue decline too rapidly for digital revenue to catch up.
But readership has held steady, pushing the company to launch a digital subscription service that bundles its titles together, along with dozens of high-profile American offerings, in a bid to get its magazines in front of more readers and make them more attractive to advertisers. Mr. Pelley said in an interview as the company launched Next Issue Canada last month: "It went from a concern to an area of potential growth with the creation of the tablet. We're now looking at the migration to digital as an incredible opportunity for subscription-based products."
Next Issue is a joint venture between publishing titans Condé Nast Publications Inc., Hearst Corp., Meredith Corp., Newscorp and Time Inc., which means some of the most respected magazines in the world will be offered alongside Canadian mainstays such as Chatelaine and Maclean's. Next Issue Canada will be led by Ken Whyte, who was president of Rogers Publishing. Rogers said Tuesday it will announce a replacement for Mr. Whyte imminently.
The layoff comes as Rogers Communications prepares to welcome a new chief executive officer next month. Guy Laurence, who takes over from Nadir Mohamed, will face several challenges outside of the company's comparatively small publishing division (which only generates about a quarter of the company's profits).
BCE Inc. is rolling out its Fibe television and Internet service in Ontario and Quebec. In doing so, its Bell division is targeting key urban markets, such as Toronto, that were formerly a cable stronghold. Competition is also fierce in the smartphone market. It has been years since Bell and Telus Corp., which share a national network, broke Rogers's exclusivity on the iPhone.
Given that Rogers is Canada's largest wireless carrier with more than 9 million subscribers, the spectre of smartphone saturation is raising questions about the future growth of ARPU (average revenue per user) – a key metric that reflects the average monthly consumer bill.