When Mark Zuckerberg hosted a town hall in late May with Facebook Inc.’s 48,000 employees, some were tuning in from new cities they had scrambled to move to as the pandemic hit.
Mr. Zuckerberg had a clear message for them: If you plan to stay, expect a change to your pay.
“That means if you live in a location where the cost of living is dramatically lower, or the cost of labour is lower, then salaries do tend to be somewhat lower in those places,” he said on the video conference, where he announced more employees would be allowed to work remotely permanently.
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Mr. Zuckerberg gave Canadian and American workers until Jan. 1, 2021 to inform the company about their location, so it can properly complete taxes and accounting and use virtual private network checks to confirm staff are where they claim.
The demand is part of a new reality Canadian workers are being confronted with as employers try to quell the spread of COVID-19 and increasingly consider making remote work permanent.
The shift means many companies are having to rethink salaries and compensation, while grappling with the logistics of a new work model.
Only one-third of Canadians working remotely expect to resume working from the office as consistently as they did prepandemic, while one in five say they will remain primarily at home, according to a June study from the Angus Reid Institute.
Like Facebook, Canadian technology companies Shopify Inc. and Open Text Corp. have already announced more employees will soon have the option to permanently work remotely.
Both declined interviews with The Canadian Press, but Richard Leblanc, a professor of governance, law and ethics at York University, said he wouldn’t be surprised if their staff that relocate will see their pay change.
“It’s inevitable because the cost and expense structure of work has changed,” he said.
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“If you, for example decide, that you could do the majority of your work from well outside the Greater Toronto Area … and you want to buy a home in Guelph or in Hamilton, should we expect the base salary for those individuals might change? Yes, because your cost of living has changed and your expenses have changed.”
If companies calculate salaries properly, neither the business nor workers should feel their salary adjustments are unfair, Prof. Leblanc said.
However, figuring out what to pay staff transitioning to permanent remote work is tough, especially with a pandemic raging on and forcing some businesses to lay off workers or keep companies closed.
Owners have to consider what salaries will help them retain talent, but also how their costs will change if workers are at home.
Companies, for example, may be able to slash real estate costs because they don’t need as much – or any – office space, but may now have to cover higher taxes, pay for their workers to buy desks or supplies for their homes or offer a budget for them to use on renting spaces to meet clients.
“[Businesses] are looking at every line item on their on their income statement … because they want to make sure they can survive and thrive over the long-term,” said Jean McClellan, a partner at PricewaterhouseCoopers LLP’s Canadian consulting practice.
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Companies such as GitLab, an all-remote company in San Francisco focused on tools for software developers, may offer some clues about how Canadian companies opting for permanent remote work can tackle salaries.
When GitLab started offering permanent remote work years ago it built a compensation calculator combining a worker’s role and seniority with a rent index that correlates local market salaries with rent prices in the area.
Anyone can visit GitLab’s site and plug in a role, experience level and location to find a salary.
GitLab’s junior data engineers, for example, make between $50,936 and $68,913 if they live in Whitehorse, Yellowknife or Iqaluit, where the Canada Mortgage and Housing Corporation said the average rents for a two-bedroom home last October were $1,695, $1,100 and $2,678 respectively.
That salary shoots up to anywhere from $74,359 to $100,603 for those living in Toronto, Vancouver or Victoria, where CMHC reported the average rents for a two-bedroom home last October were $1,562, $1,748 and $1,448 respectively.
Prof. Leblanc warned that varying remote work salaries can create “a global competition for talent in an online world.”
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People who apply for permanent remote jobs, he said, may find their fighting for the role against far more people than ever before because companies will be able to source talent living anywhere in the world.
The companies that don’t offer remote work at all could also find themselves at a disadvantage, if their industry starts to value flexibility and look less favourably at companies that don’t offer it.
GitLab settled on its model and calculator because the company said they offer transparency and eliminate biases around race, gender or disabilities.
Its co-founder Sid Sijbrandij wrote in a blog that the calculator was dreamed up because every time he hired someone, there was a conversation around reasonable compensation.
The negotiation would usually revolve around what the person made beforehand, which was dependent on what city they were in. Gitlab scrapped that model in favour of the calculator and also started letting workers know if they move their salary could change.
However, GitLab acknowledges that many people see paying someone less for the same work in the same role regardless of where they live as “harsh.” The company disagrees.
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“We can’t remain consistent if we make exceptions to the policy and allow someone to make greater than local competitive rate for the same work others in that region are doing (or will be hired to do),” it says.
“We realize we might lose a few good people over this pay policy, but being fair to all team members is not negotiable.”
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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.
