Canwest Publishing internal memo details severe cost cutting measures

Canwest Publishing details severe cost cutting measures including freeze on hiring, salary increases, travel, consultants, conferences and more

I have obtained an internal memorandum from Dennis Skulsky, President and CEO of Canwest Publishing and Doug Lamb, Executive Vice President & Chief Financial Officer, Canwest Publishing which details a series of significant cost cutting measures to be implemented by Canwest newspapers across Canada.

Canwest Publishing is a division of Canwest Global Communications Corporation.

Canwest publishes the National Post, Vancouver Sun, Ottawa Citizen, Edmonton Journal and other major market and community newspapers with a combined weekly readership of over 5 million. Canwest Global also owns the Global Television network.

Canwest reported a $33 million quarterly loss earlier this month and recently announced it was dropping morning and noon newscasts at Global Toronto's television station.

The cuts include:

A freeze on all hiring.

A freeze on salaries until the end of the fiscal year.

A freeze on travel with "essential" travel requiring publisher's approval for economy class or best price single tickets only.

A freeze on meals, catering and entertainment expenses, including food at meetings.

A freeze on attending conferences and seminars.

Ending contracts with external consultants.

Limiting use of cell phones, with a goal of reducing the number of cell phones by 20 to 25%.

Delaying capital expenses unless absolutely necessary.

Reducing energy usage.

Cancelling subscriptions.

Creating a Voluntary Vacation Leave program for unpaid employee holidays.

Suspending "national employee events for this year," including the Vancouver Sun Run, Hockey Tournament, Slo-Pitch Tournament, Enlightened Leader sessions and Leadership Forum.

[NOTE - The Georgia Straight's Charlie Smith reports tonight that Vancouver Sun Managing Editor Kirk LaPointe tells him the Sun Run has NOT been cancelled - the Canwest memo is unclear as to it's status - as you can see below.]

Encouraging employees to suggest further cost-cutting measures.

Here is the complete internal memo:


MEMORANDUM

Date: January 23, 2009

To: All Canwest Publishing

From: Dennis Skulsky and Doug Lamb

Subject: Cost Control

As you know, our business is facing unprecedented pressure due to both the global economic downturn and challenges to our traditional publishing business.

The recent voluntary buyout program and costsaving initiatives we have implemented are proving to not be enough to offset advertising revenue shortfalls.

We are faced with significant advertising declines across the board but in particular in our employment, real estate and auto advertising categories.

As a result,across our organization, teams are taking a hard look at how to affectthe one lever we have absolute control over, our costs.

Following are a few initiatives underway and additional tactics that will contribute to our cost savings objectives:

· A freeze on all hiring. All new hire requests – including replacement and backfill positions – must be approved by the appropriate publishing executive management committee member and the SVP People. Expenses for consultants, freelancers and contractors mustbe approved at the publisher/SVP level.

· A freeze on salaries until the end of the fiscal year (September). Any exceptions must be approved by the President of Publishing.

· A freeze on travel. Essential travel must be approved inadvance of booking at the publisher/SVP level. All approved travel should be economy class or best price single tickets only – for alllevels within the organization.

· A freeze on meals, catering and entertainment expenses. An immediate freeze on all food at meetings. This includes previouslyfunded or subsidised coffee/snacks/drinks. Only expenses related toexternal customers and suppliers that are pre approved will be reimbursed. Approval for the expenses must be obtained in advance from a Publisher or SVP level executive.

· Evaluation of marketing and promotional spends. All marketing and promotional activities will be reviewed and re-evaluated. Approval for the expenditures must be approved by a Publisher or SVP level executive.· Ceasing engagements with external consultants. Consultants should only be used for those limited instances where a specific expertise which does not reside within our organization is absolutelyrequired.

· A freeze on conference/seminar attendance. Attendance at anyexternal conference must be approved by a Publisher or SVP levelexecutive and is expected to be severely curtailed. At this time, all external training expenses are to be halted.

· Equipment expense and capital purchases will be delayed unless absolutely necessary.

· Limiting the use of mobile devices. All contracts arecurrently under review to ensure the appropriate service level with the objective of limiting data usage and reducing the number of unitsby 20-25%.

· Reducing energy usage. Many companies, including our NetworkTen in Australia have significantly reduced costs by better managingthe use of energy and hydro.

· Use discretion when printing. Whenever possible avoid printing unnecessary copies by reading on your desktop. Colourprinting should be used only when necessary. When printing multiple pages, set printer defaults to double-sided output.

· Subscriptions. Cancel those subscriptions which are not essential.In addition, we are announcing a Voluntary Vacation Leave program. Any employee may make a request for unpaid vacation days between now and August 31st to their manager.

Approval is at management's discretion and based upon impact to the operation. This voluntary program will allow employees to take unpaid days in addition to their allotted paid vacation days for longer holidays or family time. Details of the program will be communicated next week.

We have also decided to suspend a number of our national employee events for this year including the Hockey Tournament, Sun Run,Slo-pitch tournament, Enlightened Leader sessions and Leadership Forum.These critical measures must be taken to weather the current economicclimate we're doing business in.

We appreciate all the efforts that have been taken by everyone during these difficult times. Corporate and Broadcasting are taking similar measures, and in the coming week, your manager will be following up with you to discuss anyfurther cost-control measures specific to your department.

The above list of measures is by no means exhaustive and we are sure there are many other measures that can be implemented to help reduce operating costs. Please feel free to share any additional ideas orthoughts you may have in this regard by e-mail at reducingcosts@canwest.com .

Just think, if every employee could save$1000, the collective savings would amount to 10,000,000! Our overarching goal is to come out of this with stronger businesses that best position us for the future.

Your involvement, support and hard work to maximize our cost savings initiatives are sincerely appreciated.

Dennis Skulsky
President and CEO, Canwest Publishing

Doug Lamb
Executive Vice President &Chief Financial Officer, Canwest Publishing

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