Updated: Tue Nov. 03 2009 7:06:24 PM

The Canadian Press

TORONTO — The Toronto Star has launched what its publisher is saying will likely be the biggest restructuring in the newspaper's history by offering voluntary buyouts to employees in all divisions of the company.

John Cruickshank told employees in a memo Tuesday that the broad reworking of the company "will affect every job in every corner of the organization" and could include layoffs.

He also said that Canada's largest circulation daily paper is also exploring the possibility of contracting out some work in both copy editing and pagination work. The plans could expand to include editorial content and other production, he added.

"We must find the best way to operate our business at the lowest possible cost, including contracting out non core functions where there is a sound business case to do so," he wrote in the memo.

"This will involve what is likely to be the biggest restructuring of the Star's workforce in its history."

Cruickshank said the company has already notified the Communications, Energy and Paperworkers union that it could contract out some work. The company would also need to formally notify the union of any layoff plans, according to the collective agreement.

The union issued its own statement saying the Star has told them it plans to contract out as many as 100 union editing jobs. The newspaper has 390 employees in the editorial department.

Another 60 jobs are expected to be cut in advertising and graphics, the union said.

Toronto Star spokesman Bob Hepburn declined to confirm those estimates, citing confidentiality reasons.

He said the severance packages will be offered to both union and non-union members in all departments, and that the company doesn't have a set quota for how many people it hopes will accept the packages.

Union leader Maureen Dawson criticized the Star's decision and said the labour group plans to offer alternatives to the planned outsourcing move.

"Journalism is a collaborative effort, the product of a team of reporters, photographers and editors working in concert to produce the kind of activist agenda that has served Star readers and our community so well for so long," she said.

"To remove a critical element of that work is to shortchange everyone who depends on it."

The Star employs about 1,300 staff across all its divisions, including its press centre in Vaughan.

Employees will have until Nov. 30 to apply for the buyouts, and the company intends to make its final decisions by Dec. 7.

The newspaper, which celebrated its 117th birthday on Tuesday, has been grappling with industry-wide problems that have worsened with the weaker economy.

The industry has faced tighter profits and lower readership as some subscribers migrated to the Internet for their news and advertisers pulled back how much space they purchased.

"Like all newspapers and media organizations, the Star is facing major challenges because of the Internet and changing readership habits," Hepburn said.

"We're moving to transform the Star into a multiplatform content organization and we want to reduce costs. This is just one of the cost cutting measures that the Star has taken to address the decline in revenues in the last year."

In the second quarter, Torstar Corp. (TSX:TS.B), owner of the Star and one of Canada's largest newspaper publishers, reported a loss of $4.4 million compared with a profit of $36.2 million a year earlier, hurt by a tax charge and lower advertising.

Quarterly revenues fell to $373.7 million, about 6.3 per cent lower than the $398.8 million last year.

Torstar employs about 7,000 workers across all of its operations, which include a variety of daily and community newspapers and the Harlequin books division. The company is scheduled to report its third-quarter results on Wednesday.