January 14, 2014 Last Updated 3:52 pm

Postmedia Network’s Calgary Herald layoffs off classified phone room staff

Classified advertising to be managed through Media Sales Plus of Williamsville, NY

The Canadian newspaper chain Postmedia Network announced that it would outsource its classified advertising phone room to Media Sales Plus of Williamsville, N.Y. As a result, about 48 employees will be let go.

Postmedia recently reported a 8.4 percent decline in revenue for the company’s first quarter, and a 12.2 percent decline in print advertising.

pmn-logo-smMedia companies that outsource sales almost always do so to decrease costs, rather than as part of a revenue growth strategy (though there are exceptions, especially in the small magazine side of things). Outsourcing of the classified phone room usually involves the “voluntary” side of the business, those in-coming calls from private party advertisers, as well as some contract accounts handled over the phone.

But the loss of a phone room also means the loss of small business advertising. Most newspapers have never migrated their classified phone rooms from their traditional role of private party and small business classifieds to Internet advertising phone rooms – mostly due to the lack of new Internet product launches.

The loss of a phone room is usually irreversible as rehiring and rebuilding the capability rarely occurs.

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