By Reuters | Updated: February 9, 2024
OTTAWA, Feb 8 (Reuters) – Bell Canada (BCE.TO), opens new tab said on Thursday it was slashing 4,800 jobs to rein in costs that the media and telecom company blamed on declining legacy phone and news business and “unsupportive” government and regulatory decisions.
Bell’s biggest restructuring in about three decades will see about 9% of its workforce laid off and marks the second shakeup since last year, when it announced plans to cut 1,300 workers as revenue from legacy businesses dried up.
“We need to take additional measures in response to increasingly unsupportive federal government and regulatory decisions,” Bell CEO Mirko Bibic said as the company reported financial results, which saw profit for quarter ended December dive 23.3% to C$435 million ($323 million).
Bibic blamed the federal government for failing “to level the playing field with global tech giants” and said the Canadian Radio-television and Telecommunications’s (CRTC) decision to force Bell to let competitors use their infrastructure to sell internet services was “of particular concern.”
The CRTC cited declining competition among high-speed internet service providers when it announced that decision in November. In response, Bell said it would cut capital spending by C$1 billion.
Canada’s Heritage Minister Pascale St-Onge said it was “a dark day” for those losing their jobs and that she was “extremely disappointed” in Bell’s decision.
“There were changes made at the CRTC to help those companies that are facing challenges, but at some point companies also have to chip in. And again, they are not going bankrupt. They’re still making billions of dollars,” St-Onge told reporters in Ottawa.
The Montreal-based company’s operating revenue increased 0.5% to C$6.47 billion in the fourth quarter. Bibic said advertising revenue had declined in 2023 and news operations were posting losses, and that the latest job cuts are expected to save the company between C$150-$200 million this year.
British Columbia premier David Eby called Bell and others like it “corporate vampires” and urged the federal government to intervene. “They have overseen the crapification of local news by laying off journalists,” Eby told a news conference.
Canada has also passed a law to force tech companies to pay Canadian publishers for news after years of complaints from the media industry about news businesses losing the online advertising market to large tech firms like Alphabet’s Google (GOOGL.O), opens new tab and Meta Platform’s (META.O), opens new tab Facebook.
The law, the Online News Act, led to a deal in which Google will pay C$100 million annually to news publishers in the country, while Facebook chose to block news-sharing on its platforms in Canada.
($1 = 1.3456 Canadian dollars)
© Thomson Reuters 2024
