Yellow Pages cut 500 more jobs in struggle to survive
An iconic Canadian company with roots in print phone books has laid off nearly 18 percent of its workforce in what may be its latest attempt to remain viable in the digital age, an industry expert has said.
“I think that’s it,” said Louis Hébert of the HEC business school at the University of Montreal.
He said Montreal-based Pages Jaunes Ltée had two options: give themselves some breathing room to develop a new strategy or stabilize the organization for a potential buyer.
“The alternative to these scenarios is gradual degradation and bankruptcy or a clearance sale,” he said in an interview.
The Yellow Pages have cut another 500 jobs across the country as it continues to fight the shift in consumer preferences from printed directories to digital directories.
The company said the job cuts, which took effect on Tuesday, are in addition to the 300 jobs cut in October 2015.
Considerable efforts have already been made to transform Yellow Pages, founded in 1908, from a publisher of printed directories to a digital model in an era of increasing cell phone use.
Digital now accounts for 70% of revenues, but even these have stagnated and declined slightly in recent times.
Hebert said this type of transition is risky and the Yellow Pages have shown he is unable to do so, especially when faced with deep-pocketed competitors like Google, Facebook, Amazon and Microsoft.
“They have the same problem as newspapers or magazines where basically the whole environment has moved on,” he said.
Hebert said the turning point was when Bell Canada sold the operations in 2002.
“Their bread and butter are gone. In fact, the whole purpose of the Yellow Pages is gone.
A revolving door of executives tried to stabilize the business by going digital, but the speed of change in their environment meant they were still catching up, he said.
Yellow Pages chief executive David Eckert said the decision to cut jobs is difficult but “absolutely critical to ensuring the short-term health of the business while building a great business that offers great opportunities for the business. ‘to come up”.
“Today’s actions are one element resulting from a comprehensive review of our operating and capital spending, aimed at creating a solid financial base for stability and growth,” he said in a statement.
Yellow Pages said it expects to take a restructuring charge of $ 17 million related to the decision.
Company spokeswoman Jolle Langevin said cutting jobs to cut spending is one of many measures being considered and more measures may yet be announced.
“Everything is on the table,” she said.
Analyst Vahan Ajamian of Beacon Securities Ltd. said investors would be encouraged by the “nonsense” attitude adopted by Eckert more than three months after his appointment.
In addition to cutting costs, he restructured the company’s debt.
“I think these are positive signs, but investors need to see what the outlook is for the year and then for the future,” he said.
Ajamian said the latest moves could position the company to sell all or part of the business.
“This could be the mandate of the new CEO,” he said. “It’s definitely about selling some of the non-core acquisitions they’ve made and / or the company as a whole.”
In addition to the printed Yellow Pages directories, the business is a digital media and marketing company.
Its online properties include YP.ca, RedFlagDeals.com, Canada411.ca, 411.ca, Bookenda.com, DuProprio.com, ComFree.com and PJ NextHome.