On Thursday, the parent company of Canada’s largest news operation announced its intention to reduce its workforce by 4,800 jobs in a cost-cutting measure. The media and Telecom Company attributed the need for such measures to the diminishing legacy phone and news business, along with what it termed as “unsupportive” government and regulatory decisions. This represents the most substantial restructuring in approximately three decades, resulting in the layoff of about 9% of Bell’s workforce. Notably, this is the second major overhaul within the past year, following last year’s announcement of plans to cut 1,300 workers due to a decline in revenue from legacy businesses.
CEO Mirko Bibic cited the need to depart from traditional operational models in its telecom and news business in an open letter to employees. He also noted that the federal government had failed to help the country’s struggling media sector through The Online News Act and updates to the Broadcasting Act.
He slammed what he described as CRTC decisions that “undermine investments in the telecommunications network and fail to level the playing field with global tech giants.”
On the telecom side, Bibic warned that Bell could further scale back its network spending as it remains at odds with the governing body over the predetermined regulatory direction. He also noted that lowering infrastructure investments would allow the CRTC to “prioritize measures to bring down the cost of telecommunication services.”
The company plans to close 107 of its Source stores and sell 45 radio stations nationwide to seven buyers. It will also stop offering fiber internet speeds higher than 3Gbps, saving it about C$150-$200 million this year. In addition, it will stop offering bundled phone, TV, and internet packages, saving the company money.
The company said it would use severance packages, career transition, and other benefits to support affected employees, including continued access to health care. It will also offer them opportunities to move into new roles at the company. To reduce its footprint, it will close offices and sell broadcast studios, though it will keep a handful of locations in cities like Toronto.
Despite the job cuts, the company still has much potential in the future, especially in streaming video. It’s partnered with Netflix to offer its subscribers exclusive content and is looking to expand in sports, movies, and television shows. It’s also making significant investments in virtual reality.
BCE, based in Toronto, is the largest Canadian-owned media and telecommunications company by revenue. It owns various assets, including the CBC and several local TV and radio stations.
Robert Malcolmson, executive vice president and chief legal and regulatory officer for Bell’s media branch, told The Canadian Press that the company’s media branch couldn’t continue operating its various brands, such as CTV National News, BNN and CP24 separately, and that its time to adapt how it delivers the news significantly.
He added that the company will have to decide whether it can survive without its news division, which has lost about $25 million in revenue annually. He also noted that if the company can’t sell its Hamilton and Windsor radio stations, it may have to close them altogether.