Thursday, March 26, 2009

Facing A Shortfall, CBC Will Cut 800 Jobs

The Canadian Broadcasting Corporation, publicly owned operator of national television and radio networks in Canada, will cut at least 800 jobs and try to sell assets to fight a growing financial shortfall caused by an advertising downturn.

The head of the CBC says the public broadcaster will strive to keep local stations open as it slashes jobs.

In a broadcast to CBC's 9,850 employees, Hubert Lacroix has announced that 800 full-time jobs will be eliminated across the country in an effort to balance the budget.

However, it's impossible to say exactly how many layoffs there will be because the public broadcaster will offer buyouts first and wait for employees to take them before re-evaluating the situation around mid-May.

Lacroix says CBC is facing a 171-million-dollar shortfall this fiscal year amid falling advertising revenue.

In past years, the government has offered additional money on top of the usual $1.1 billion allocated to the CBC, but in the past couple of weeks Heritage Minister James Moore repeatedly said the extra funds would not be forthcoming.

However, the government is in discussions to help out the debt-laden Canwest Communications Corp. (TSX:CGS.A) as well as other private broadcasters facing massive shortfalls as viewers turn to the Internet and the struggling auto industry cuts back advertising in media.

In a statement released early Wednesday afternoon, the CBC said it was committed to keeping radio commercial-free and also retaining Canadian programming in prime-time hours. It also announced that executive salaries would be cut by 10 to 20 per cent. Media spokesman Marco Dubé said this represents a total savings of $2 million in salary freezes and cuts to bonuses (incentive payments) for the executives.

"We've done and will continue to do everything we can to minimize the impact of the situation on our staff," said president and chief executive Hubert T. Lacroix in the statement.

"But in a company where 60 per cent of the overall budget goes to salaries, it's simply impossible to bridge a gap of this magnitude without having a major impact on people."

The CBC also outlined a business plan that includes seeking government approval to sell $125-million-worth of assets.

The plan is to cut about 400 jobs in its English services, about 330 in its French services and another 70 corporate positions.

Layoffs could start in May.

Other measures cost-cutting announced included:

- Decreasing regional programs in radio and television, as well as reductions in news, current affairs, drama, special event, and music programming;

- More repeat presentations to fill the empty slots left behind by these reductions;

- Decreasing the marketing budget;

- Streamlining production;

- Slashing discretionary travel and hospitality expenses;

- Slowing down recruitment.

The CBC, like all media organizations, has been hit hard by the sharp drop in advertising revenues. But the federal Conservative government has refused any further financial assistance to the CBC, which already gets $1.1 billion in public funding each year.

CBC president Hubert Lacroix has already warned that the looming cuts will change the "very nature of our service to Canadians."

Facing a shortfall estimated at between $65 million and $100 million, it's almost certain that local programming nationwide will take a hit, said Ian Morrison, spokesperson for Friends of Canadian Broadcasting, a watchdog group.

"It has to affect their local, their grassroots services around the country ... likely it's something that will reduce their capacity to offer local television and radio services in small to medium-size centres across the country," he said.

Christopher Waddell, associate director of Carleton University's School of Journalism and Communication, told CTV Newsnet that broadcasters are faced with both long and short-term problems.

"All broadcasters are facing two issues. In the short-term, the recession and the advertising drop off," he said. "And the other thing broadcasters are dealing with, that all media is dealing with, is the changes technologically," he said. "The old audiences don't exist in the same way."

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