Bell Canada lays off 1,300 staff, creates new panic in media

 Bell Canada lays off 1,300 staff, creates new panic in media

Image courtesy: Bell

In a shocking development earlier today, Bell Canada announced the layoffs of 1,300 staff across all levels. Bell lays off staff mainly in management positions, which will see a 6% reduction. This will lead to 20% fewer executive roles in the company over 2020. In addition, the company is also closing or selling nine radio stations as it “significantly adapts” how it delivers news. The news has sent jitters through the Canadian media industry, representing the broader stress various players face.

The Canadian Press broke the news first, earlier today. It got access to an internal memo from Richard Gray, Vice President of News at Bell Media. The memo informed employees of the layoffs and closures this morning.

Subsequently, Robert Malcolmson, EVP of Bell and chief legal-regulatory officer had an interview with The Canadian Press. He claimed that Bell’s media division “can’t afford” to carry on with its various brands operating independently of one another. These include CTV National News, BNN, CP24, its local TV news stations, and radio channels.

According to Gray, the strategy called for switching to a unified newsroom approach across brands, enabling more efficiency and collaboration.

Thereafter, Mirko Bibic, President and CEO of BCE Inc. and Bell Canada, published an open letter online. The open letter to Bell staff confirmed the news and provided colour on the background and details of the decision. Bibic mentioned that Bell’s highly competitive industry is unforgiving to those who don’t adapt and shared several internal challenges.

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Layoff and closure action already underway

Six of Bell’s radio stations were already off air as of this noon EDT. These include Funny 1290 Winnipeg, Funny 1060 Calgary, and TSN 1260 Edmonton. In addition, Vancouver’s BNN Bloomberg Radio 1410 and Funny 1040, along with London’s NewsTalk 1290, were also off-air. Bell also plans to sell Hamilton’s AM Radio 1150 and AM 820 and Windsor’s AM 580 to a third party.

The bios of several producers and anchors at CTV had already been updated as past employees.

As for some respite, the letter mentions that laid-off staff will get help with career transition and fair severance. Additionally, employees can continue to use Bell’s Employee and Family Assistance, mental health services, online health care, and its health benefits.

Bell Canada has been in a tough spot financially, leading to layoffs

As per the letter, Bell Canada loses over CA$250 million annually in legacy phone revenues. Across Bell Media’s news operations, there are CA$40 million and growing annual operating losses, despite being Canada’s news leader. In addition, the profitability of its radio business has been cut in half since the onset of COVID.

Bibic went on to hint that unfavourable regulations and a challenging economic environment are part of the reason for Bell’s troubles. He said that the above instances were just three examples demonstrating Bell’s necessity to hasten its departure from the traditional business models of telecom and media. Bell must reinvent itself to succeed in today’s harsh economic, regulatory, and competitive climate.

Further, he cited some silver linings that Bell has achieved in recent times, such as the new partnership with Air Canada, content agreement with Warner Bros. Discovery, exclusive agreement through Staples, acquisition of FX Innovation, and the continued rollout of Canada’s most extensive fibre optic and 5G networks. Moreover, Bell will eliminate vacant positions to minimize the layoff impact wherever possible.

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Troubles of Bell Canada not different from US counterparts

According to the May 2023 Challenger Report, which analyses layoffs, the media industry in the United States has reported more than 17,000 cuts so far this year, the biggest year-to-date total in history. Vox Media, CNN, Buzzfeed, Washington Post, NBC, CNBC, and many other known names have made significant job cuts.

On its part, in February 2021, Bell Media laid off 210 employees in Toronto. Bibic also alluded to the same in his letter:

 “The job reductions are consistent with but smaller than similar reductions announced by other leading technology and media companies across North America in recent months.”

Mirko Bibic, President and CEO of BCE Inc. and Bell Canada

In his interview, Malcolmson criticized the CRTC’s “relentless regulatory intervention” that has prioritized steps to lower the cost of telecommunication services at the behest of Ottawa. Despite Canada’s high general inflation rate, he pointed out that the price of wireless service has decreased by around 25%, and the price of broadband high-speed internet has increased by less than 1% over the last three years. He said:

“I think the government’s sort of populist focus on pricing isn’t necessarily in line with current reality, and the government has created an intensely competitive industry structure that they should allow to play out.”

Malcolmson added that Bell has been waiting for regulatory change for years and that the business has opted not to delay making cuts any longer, while awaiting the results of regulatory consultations on those bills. He also stated that the corporation would wait and watch how the regulatory climate develops but did not wholly rule out additional layoffs in the near future.

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