TORONTO - Torstar Corp. is cutting 160 jobs, including the entire Internet production staff at its flagship Toronto Star daily, in a restructuring prompted by continuing weakness in the newspaper industry.

The publisher said Thursday the restructuring involves "a combination of voluntary and involuntary staff reductions'' and that the company will take a $21-million charge as part of the process, but expects to save $12 million annually in labour costs.

Most of the job cuts, taken through severage packages, were already expected, but the Internet layoffs came as a surprise, said Maureen Dawson, an official with the Communications, Energy and Paperworkers Union of Canada.

"Their message to the world is that they're all dedicated to the Internet, but then they lay off the whole department,'' she told The Canadian Press shortly after meeting with Torstar respresentatives.

"The Star has said they would tell us in the coming weeks where the (Internet) work would go. We have an idea where one or two of the positions would go -- but not all of it.''

"I don't think it's clear where it's going for them either.''

The series of layoffs and severance packages could also lead to an unspecified number of new hires -- at lower costs -- to fill the recently vacated positions, according to a Torstar spokesman.

"Torstar is trying to keep its cost structure at a level that is reasonable,'' said Bob Hepburn, the paper's spokesman.

"Across the newspaper industry in North America the trends in recent years for advertising have been challenging.''

The parent company of the Toronto Star, Canada's largest-circulation newspaper, wouldn't provide full details of the staff reductions, though Hepburn noted the total "net reductions'' would include the voluntary exit of 122 Star employees.

The company also owns other Ontario dailies such as the Hamilton Spectator, the Metroland stable of community papers and the Harlequin romance-novel publisher, along with Internet sites such as and

Employees at the Metroland papers, which include more than 100 community publications -- of which three are dailies -- would also be affected.

Metroland has 4,400 workers while the Star employs about 1,800 people.

The staff cuts are the latest to rock the North American newspaper industry, struggling because of falling circulation and the growth of online news sources.

On Thursday, a union official said the Montreal Gazette, owned by CanWest Global Communciations Corp. will soon lay off 46 employees in its sales and service department. Meanwhile, The New York Times Co. posted a loss of US$335,000 in the first quarter on slumping advertising revenues at its newspapers.

In a letter to staff, Toronto Star publisher Jagoda Pike said that the paper's "strategy has focused on taking responsible steps to deal with the substantial revenue declines that the Star, like other papers, has been experiencing.''

"Our two largest expenses are labour and newsprint,'' Pike wrote.

"We tackled newsprint first and reduced our consumption by more than 10 per cent through a number of initiatives. We then took steps to reduce labour costs, including through changes to our collective agreements and now with the (voluntary severance program).''

The Star ratified a new contract with its staff in January, averting a strike. It said at the time that the three-year agreement would help the newspaper transition from a traditional print-focused organization to one that deals with multimedia -- both print and online.

In February, Torstar warned that 2008 could be a tough year for its Ontario newspapers because of the province's challenging economic outlook.

Ontario's key manufacturing sector, especially forestry and automotive industries, have been hit hard by the slumping U.S. economy and high Canadian dollar, which have squeezed the province's industrial exports and led to the loss of thousands of jobs as mills and factories shut down.

Torstar had 2007 net profits of $101.4 million, up 28 per cent from 2006, but said this was boosted by favourable newsprint costs and adjustments for lower future tax rates -- conditions unlikely to be repeated in 2008.

In Thursday trading on the Toronto Stock Exchange, Torstar shares were up 20 cents at $16.14, with a 52-week high and low of $23.40 and $15.73.