Aurora Cannabis Inc. is making its second round of significant cuts this year as it continues with a restructuring plan meant to address profitability struggles.
The Edmonton-based cannabis company announced Tuesday that it will reduce its selling, general and administrative workforce by 25 per cent immediately and another 30 per cent of production staff will be laid off from the company over the next two quarters.
“This has not simply been a cost-cutting exercise,” said Michael Singer, Aurora’s executive chairman and interim chief executive.
“We have undertaken a strategic realignment of our operations to protect Aurora’s position as a leader in key global cannabinoid markets, most notably Canada.”
Operations to cease at 5 facilities
On top of layoffs, Aurora has also decided to cease some operations at five facilities — Aurora Prairie in Saskatchewan, Aurora Mountain in Alberta, Aurora Ridge in Ontario and Aurora Vie and Aurora Eau in Quebec — over the next two quarters.
Part of Aurora Vie will remain operational to allow for the manufacturing of certain higher margin items, in line with the company’s decision to focus production and manufacturing at the company’s larger scale and more efficient sites.
By the end of the company’s 2021 second quarter, production and manufacturing at Aurora Sky in Alberta, Aurora River in Ontario, Whistler Pemberton in British Columbia and Polaris in Alberta will be consolidated.
The company will also record production asset impairment charges of up to $60 million during its fourth quarter and a charge of up to $140 million in the carrying value of certain inventory.
Singer expects that these moves will improve gross margins and accelerate Aurora’s ability to generate positive cash flow.
“We believe that we now have the right balance for the long-term success of Aurora — market leadership, financial discipline, operational excellence, and strong execution,” he said.
“We remain focused on making Aurora a profitable and robust global cannabinoid company.”
Cannabis industry struggling
Aurora’s cuts come as the cannabis industry is struggling amid COVID-19, which caused several companies to close their stores to stop the spread of the virus.
Cannabis companies were facing headwinds prior to the pandemic, even as they started rolling out the country’s first legal edibles, beverages and vapes.
Many pot businesses rang in the new year with cuts to staffing and dramatic restructurings that saw facilities close and significant writedowns taken.
In February, Aurora announced it was taking $1 billion in writedowns and would lay off 500 employees as part of a restructuring of its spending plans. The company also said its chief executive Terry Booth was retiring and a search was underway for his successor.
Singer chalked up the moves as being part of retail constraints, evolving consumer demand and provincial distributor inventory management adjustments, but said he remains “extremely bullish” on the long-term potential of the Canadian medical and consumer markets.
Aurora competitor Canopy Growth Corp. was hit with troubles too.
It said in April that it will lay off 85 full-time workers and close its indoor facility in Yorkton, Sask. to align its production in Canada with market conditions.
Canopy also ended farming in Springfield, N.Y., cultivation work at a facility in Colombia and operations in South Africa and Lesotho.
The Canopy cuts came after the company laid off 500 employees, closed some of its greenhouses and took writedowns of between $700 million and $800 million at the start of the year as it dealt with profitability challenges.
Canada’s economy creates almost 1 million jobs in June – Canada Immigration News
Lifting coronavirus-related lockdown restrictions around the country has sparked the beginning of Canada’s economic recovery.
Many Canadians and permanent residents returned to work for their previous employers while others started new jobs.
Between February and April, a total of 3 million people lost their jobs due to the lockdown, and another 2.5 million were absent from work due to coronavirus-related reasons, according to a Statistics Canada report published on Friday.
May saw a slow start of economic recovery as 290,000 people returned to work. Building on this, the month of June helped alleviate low unemployment rates across the country as employment increased by a record 953,000 people.
These last two months saw the labour market recover by a staggering 40%. Over 1.24 million people gained employment, after 3 million people lost their jobs earlier in the year.
Canada’s overall unemployment rate dropped from 13.7% in May to 12.3% in June.
In addition, the report says that labour force participation rate has increased substantially over the last two months up to 63.8% in June. In comparison, it was 65.5% in February, before coronavirus-related restrictions.
The labour force participation rate is the percentage of the population, aged 15 or older, who are part of the labour force.
This suggests that many people are now more optimistic about the potential of finding a job. The Canada Emergency Student Benefit (CESB)’s requirement to actively search for work may be another factor. The CESB was introduced to alleviate financial struggles of students who may have been affected by the coronavirus-related restrictions
Moreover, the number of people who work less than half of their usual hours also decreased in June to 26.9% down from 34.3%.
The rise of employment across all provinces is largely aligned with the easing of lockdown restrictions.
Employment in Ontario increased by 378,000 (or 5.9%), Quebec by 248,000 (or 6.5%) and British Columbia by 118,000 (or 5.4%).
As Canada begins reopening its economy, many Canadians and permanent residents have returned to work or have begun looking for work.
In addition, Immigration, Refugees and Citizenship Canada (IRCC) has returned to normal in terms of Express Entry draws. The latest draw held was an all-program draw. This means that candidates for the Federal Skilled Worker Program (FSWP) and the Federal Skilled Trades Class (FSTC) were also considered.
Since the travel restrictions were put in place to slow the spread of the coronavirus pandemic, IRCC had been holding program-specific draws, alternating between Provincial Nominee Program (PNP) draws and Canadian Experience Class (CEC) draws.
Canada’s latest job statistics is good news for these immigrants since they can expect a stronger job market once they have obtained permanent residence.
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COVID-19: Alberta reports 77 new cases on Friday, death count falls by 1 – CTV News
Alberta reported 77 new cases of COVID-19 on Friday, bringing its total number of cases to 8,596.
There are 592 active cases across the province and 7,844 people have recovered from the coronavirus.
The province’s death count fell by one on Friday, from 161 to 160. The number of COVID-19-related deaths fell from 18 to 17.
“One of the deaths reported at the Misericordia has been determined to not have COVID-19 as a contributing cause of death,” a spokesman for the province told CTV News.
The city of Edmonton has now surpassed 1,000 total cases, with 1,001. Its number of active cases sits at 173.
More than 510,000 COVID-19 tests have now been completed in Alberta.
Edmonton, Calgary top Canadian cities in unemployment – CTV News Edmonton
Alberta has the second-worst provincial unemployment rate in Canada after Newfoundland and Labrador..
According to new Statistics Canada data, unemployment reached 15.5 per cent in June.
It marks an 8.8 per cent difference from the same time last year.
The only province with a higher unemployment rate is Newfoundland and Labrador, at 16.5 per cent.
And unemployment in Alberta’s largest cities is also highest among Canadian major urban centres: about 15.7 per cent of the Edmonton workforce is currently unemployed, and 15.6 per cent of the Calgary workforce.
In May, their unemployment rates were 13.6 per cent and 13.4 per cent, respectively.
The news comes alongside a report that Canada added 953,000 jobs in June as businesses forced to close by the pandemic began to reopen.
“That’s important progress but we have a long way to go,” Alberta Premier Jason Kenney commented Friday at a news conference in Fort Saskatchewan, where a carbon capture and storage facility recently reached the five-million equivalent tonnes milestone.
Kenney’s government’s economic recovery plan centres on infrastructure projects that create jobs and making Alberta an attractive place for investment – as does the facility at the Shell Scotford complex, Kenney said.
“Projects like this are a key part of Alberta’s recovery plan to build, to diversify, and to create jobs. When the global economy comes back form COVID, when demand returns for oil and gas, we are going to see, I believe, something of a supply shortage because of all the upstream exploration that has been cancelled, and so we’ll see prices go up. And that will be a great opportunity for Alberta, especially as we make progress on pipelines,” he said.
“But there’s one critical factor, we’ve got to bring investment back. And that means we’ve got to demonstrate our progress on environmental responsibility which is why investments like this… are so important to jobs, the economy, and the future prosperity of Alberta.”
The national unemployment rate fell to 12.3 per cent after hitting a record-high of 13.7 per cent in May.
With files from CTVNews.ca
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