Bombardier will lay off 2,500 workers as the company struggles to keep its operations afloat amid dwindling demand for business jets during the COVID-19 pandemic.
In a release Friday morning, the Quebec-based transportation company said the aerospace industry as a whole is expecting to see a 30 per cent year-over-year loss in business jet sales, forcing it to reduce its workforce.
The company said 1,500 of the permanent job cuts will be in its Quebec facilities and 400 in Ontario, with the rest of the layoffs in its international facilities. The layoffs will begin this month and be carried out throughout the year.
The layoffs come just days after Bombardier made its official exit from the commercial airplane industry, selling off its CRJ regional jet program to Mitsubishi Heavy Industries Ltd. for $550 million US on Monday.
The company has recently staked its future on business jets, sales of which have dropped during the COVID-19-related recession and the subsequent decline in travel.
“Our sales books are still quite full in the long term, but we still had to adjust to the reality we’re going to be facing from now until the end of the year,” Bombardier spokesperson Mark Masluch said in an interview.
“That said, in our collective agreement and in the way we work, there is always the opportunity to call back our workforce if there’s a rebound in the market.”
Masluch insisted that the layoffs were strictly the result of COVID-19.
Bombardier paused all operations in March in an effort to protect employees from the spread of the novel coronavirus.
It gradually resumed operations again last month, but had already reported a loss of $200 million US in its first quarter.
Union disappointed by decision
The International Association of Machinists and Aerospace Workers, the union that represents Bombardier workers, said it was disappointed by the company’s decision.
In Montreal, 717 Bombardier employees benefited from the Canada emergency wage subsidy (CEWS) program, but that help was set to expire today.
Last month, the union asked that Bombardier reapply to the CEWS program but, judging by the layoffs, the union does not believe that request was ever put in.
“I don’t know exactly what motivated these decisions,” said David Chartrand, co-ordinator for the union’s Quebec branch.
Chartrand said the federal government is also to blame. He said it has been absent in supporting the aerospace industry as a whole.
“We need help from the government to support these industries, but they’ve been completely inactive,” he said.
Workers are seen exiting the Bombardier plant on Friday. (Paul Chiasson/The Canadian Press)
Quebec promises help
Quebec Finance Minister Eric Girard said Bombardier remains an important economic driver and the provincial government “will help them to go through this difficult period.”
“If they need help, I am convince that the minister of economy will be there to attach the right conditions to this help just like he did for the Cirque du Soleil,” he said, referring to a loan recently handed out to the struggling Montreal-based entertainment giant.
Prime Minister Justin Trudeau said the federal government will continue to support workers of all industries as they struggle during the pandemic.
“Obviously, the aerospace industry, airlines, are particularly affected with the ceasing of global travel and with the fact that the demand for purchasing business jets has decreased dramatically,” said Trudeau.
“We will work with industries and individual companies to try and ensure they have access to all the supports that we’ve put forward.”
Prime Minister Justin Trudeau spoke with reporters on Friday. 0:39
History of government bailouts
Bombardier, which was in trouble long before the start of the pandemic, has been bailed out before.
In 2015, then-premier Philippe Couillard agreed to provide Bombardier with a $1.32-billion bailout, in hopes of saving jobs in the province.
In return, the province would gain a 49.5 per cent stake in the company’s C-series program, later referred to as the A220. The government made a 20-year commitment to the project.
The same year, just as Trudeau was first sworn in as prime minister, Bombardier called on the federal government to match the $1-billion investment.
Although the Canadian government did not agree to those terms, it did provide the company with $372.5 million in interest-free loans in 2017.
Despite all that, Bombardier sold its remaining A220 stake to Airbus last February, in an effort to pay off a multibillion-dollar debt.
That same month, the company sold its rail-building unit to French train giant Alstom SA, marking its exit from the rail business.
In February, Quebec Premier François Legault insisted the province was done injecting money into the 83-year-old company.
“The government has already invested a lot of money in Bombardier,” he said at the time, calling Couillard’s investment a “mistake.”
As of Friday, Bombardier has 8,200 employees in Quebec and 2,100 in Ontario.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
