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Torstar shuts commuter papers less than two years after ‘major’ expansion

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Torstar shuts commuter papers less than two years after ‘major’ expansion

Nineteen months ago, Torstar Inc. announced “major national expansion” by hiring 20 new journalists to staff the newly rebranded StarMetro free daily papers in Vancouver, Edmonton, Calgary, Toronto and Halifax.

On Tuesday, the company announced internally that it was shutting the commuter papers down.

The move to close the StarMetro outlets, which the company says will affect 73 workers, comes less than a month after Torstar announced that the company lost $41 million in the quarter ending Sept. 30, 2019.

Howard Law, spokesman for Unifor, said that in light of the earnings, the cuts announced Tuesday weren’t really a surprise. Law said he believes that Torstar always intended to shut down the free commuter daily papers.

“I believe the business plan was that the print versions of Star Metro were not going to be permanent, and their purpose really was to be an onramp to get digital subscribers to a broadened editorial product that had more national content,” Law said.

“It’s not a shock, unfortunately, when they report a $41 million third-quarter loss, and their advertising revenue year-over-year in the third quarter is down 23 per cent, you know something is going to happen.”

According to Unifor, which represents some of the workers, the cuts are part of a wider set of layoffs.

Bob Hepburn, spokesman for Torstar, said in an email that the national expansion isn’t completely dead, and the company intends to hire 11 positions to staff bureaus across the country.

“Torstar is committed to providing coverage from across Canada, both in print in the Star and our six regional dailies in Ontario and through our major website thestar.com,” Hepburn wrote.

As part of the earnings report last month, Torstar eliminated its dividend of 2.5 cents per share — if the company fails to pay a dividend for eight quarters, Class B non-voting shares will obtain voting rights, which will severely undermine the dual-class share structure that allows the families of the company’s original owners to remain in control.

Torstar’s share price was relatively flat this week on news that the StarMetro papers are shutting down, but has dropped more than 40 per cent since the late October report.

In Halifax, Tim Currie, director of the journalism school at the University of King’s College in Halifax, said that it’s dispiriting to see the StarMetro shut down in their city.

“We’d hope the Toronto Star would give the outlets a bit more time to find an audience, to drive subscriptions to the Toronto Star. It seemed like it was just starting to make an impact in the city, and now it’s gone,” Currie said.

This is the second time that Torstar has reversed course on one of its signature business plans less than two years after launch.

In 2017, the company announced layoffs of 30 people as it shuttered the Star Touch tablet app after pouring $11 million into the project.

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