Get rid of the "|$" portion. That matches the end of line, and the newline is whitespace at the end of a line. Or, if you do want spaces (but not newline) removed, don't use \s. Use a literal space character in your regex. Or [ \t] to match space and tab. Whatever you want to match.

tlm correctly pointed out to me that there's more to the replacement than whitespace, so getting rid of |$ will prevent a desired replacement.