Transcontinental Reports Improved Profitability in Fourth Quarter

Rationalization Plan

The Corporation quickly instituted a rationalization plan with the goal of matching Transcontinental’s production capacity to demand in each of its markets and the decreased advertising revenues of its magazines and newspapers. Five printing plants were merged or consolidated, two others were sold, eight publications were stopped and two were sold. Close to 2,000 jobs were eliminated, half of them in the direct mail operations in the United States. A set of other temporary measures, ranging from targeted control of hiring to unpaid leaves and shorter workweeks were also instituted across the organization. Senior executives contributed by taking two weeks of unpaid leave but still working, which represents a 4% reduction in salary. In all, the recurring cost savings amounted to about $110 million, of which close to $80 million was achieved in 2009.