November 4, 2009 / 12:52 PM / 9 years ago

UPDATE 2-Torstar offers severances as profit softens

* Offers voluntary severance packages

* EPS C$0.05 vs loss of C$0.01

* Revenue down 7.4 percent at C$343.7 mln

* Shares down 4.6 percent

(Recasts. Adds details)

TORONTO, Nov 4 (Reuters) - Book and newspaper publisher Torstar Corp (TSb.TO) plans to cut editorial jobs at Canada’s biggest newspaper after reporting a weak quarterly profit.

The company, which publishes the Toronto Star, is asking employees to consider voluntary severance packages, the company said on a conference call with analysts.

“We are beginning negotiations with the union to try to come up with the best way to cut costs and maintain quality,” publisher John Cruickshank, said on the conference call.

The company did not elaborate on the plans, but the Globe and Mail newspaper reported on Wednesday that its rival may contract out more than 100 editorial and production jobs.

The Globe reported that the Toronto Star’s jobs that could be contracted out at the newspaper include copy editing, pagination and the design of the paper’s advertisements.

The Star has almost 400 editorial staff members.

The planned action comes as the company reported a soft profit caused by restructuring charges and weakness at its newspapers and digital segment.

For the third quarter, Torstar reported net income of C$4.0 million ($3.7 million), or 5 Canadian cents, compared with a loss of C$700,000, or 1 Canadian cents a share a year earlier.

The company posted net income from continuing operations of C$4 million, or 5 Canadian cents per share, down from C$16.6 million, or 21 Canadian cents, last year.

Revenue fell 7.4 percent to C$343.7 million.

Newspapers and digital revenue fell 12.6 percent to C$221.2 million.

Shares fell 4.6 percent, or 35 cents to C$7.11. ($1=$1.06 Canadian)

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