TORONTO — Management at the Toronto Star newspaper has filed formal notice of a plan to contract out newsroom production work and cut 121 jobs in a bid to save more than $4 million a year.

"At a time of unprecedented business nightmares facing the Star and our industry -- and despite the many operational challenges associated with outsourcing -- we believe there are sound business reasons for this proposal," Star editor Michael Cooke wrote in a memo to employees on Monday.

The move calls for cutting 70 full-time and eight part-time editorial jobs to tighten costs at Canada's largest circulation daily paper, which has 390 employees in the editorial department.

The round of cuts could also affect 39 full-time and four part-time pre-publishing technicians as the company considers contracting out work out to Pagemasters North America, a unit of The Canadian Press, according to Toronto Star spokesman Bob Hepburn.

The union at the newspaper, which is owned by Torstar Corp. (TSX:TS.B), now has 30 days to propose alternatives to avoid or alter either the contracting out of the work or the eventual layoff of staff.

"If we cannot agree on an alternative, and the outsourcing proceeds, no one in the newsroom will receive a layoff notice until January, at the earliest," Cooke wrote.

Maureen Dawson, chairwoman of the Toronto Star unit of the Southern Ontario Newspaper Guild said that some of the editorial jobs could be outsourced, which she believes clashes with the Toronto Star principles.

"The Star has this social voice in Canada that we're for the working class... and so at the first sign of distress they throw their own workers under the bus," she said.

"The government is spending billions on keeping jobs here (in Canada) and we're sending jobs away. I think it's shortsighted for the paper and for the employees."

Earlier this month, the Toronto Star announced what its publisher said would likely be the biggest restructuring in the newspaper's history by offering voluntary buyouts to employees in all divisions of the company.

The severance packages are being offered to both union and non-union members in all departments. Employees will have until Nov. 30 to apply for the buyouts, with the final details being ironed out in the New Year.

At that time, the union said the Star told them it plans to contract out as many as 100 union editing jobs. Another 60 jobs were expected to be cut in advertising and graphics, the union said at the time.

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

In the third quarter, Torstar reported a modest profit of $4 million compared with a year-ago loss of $740,000. Revenues totalled $343.7 million, down 7.4 per cent from $371.3 million.

Torstar shares closed up 52 cents or eight per cent at $6.90 on the Toronto Stock Exchange.