Against an economic backdrop of declining paper prices, Catalyst Paper said Monday it is laying off 85 managers and professionals as part of a year-long downsizing strategy. The restructuring has cost 565 jobs so far at B.C.'s largest pulp and paper company. Catalyst corporate affairs vice-president Lynn Brown described these latest cuts as a necessary step in bringing the B.C. producer's costs in line with those of its competitors.
All but a handful of the lay-offs will be accomplished through early retirements, she said.
"This is another step along the path to the competitive bench marks for
staffing to keep up with the market pressures we are dealing with," she
said.
"I'd like to say that we won't need to make any further adjustments but that will be dictated by market dynamics."
The announcement of the latest job losses comes before Catalyst has completely digested its last round of cost-cutting.
The company, which operates five mills on the B.C. Coast, is shutting
down a paper machine at its Port Alberni mill Sept. 1, laying off 185
workers.
And by the end of September it will have moved from its downtown
Vancouver offices where it occupies three floors, to a single-floor
office in Richmond.
The move to Richmond is expected to eliminate 130 positions, leaving a
head office staff of 150. The company has stated that it expects the
entire down-sizing program, to be completed by year-end, to bring
annual savings of $58 million to $61 million a year with a one-time
cost of $61 million.
The cuts have reduced Catalyst's employee base by about 15 per cent.
The company employed 3,500 people before the cuts began and will have
just under 3,000 by the time the announced down-sizing has been
completed, Brown said.
The paper business has been under extreme pressures as demand for
newsprint and related grades of paper continue to drop as part of a
long-term trend.
"These steps are probably not a surprise to some. While they are never
easy to take, they are certainly necessary, particularly as we see
newsprint consumption continue to slide and the Canadian dollar
continue to hold strong in the mid-90-cent US range," said Brown.
In a research report released Friday, investment analyst Mark Bishop,
of RBC Capital Markets, noted that while demand for some coated papers
has improved, the overall picture remains bleak. Across all grades of
paper, demand is down 3.6 per cent.
"In response, operators continue to take meaningful market curtailments," he said.
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