OpenText Corp. is temporarily reducing the salaries of its executives, senior leadership and other employees, and cutting its overall workforce by up to five per cent, the multinational software company announced Thursday.
It also announced the permanent closure of half of its offices while having some employees continuing to work from home even after the COVID-19 stay-at-home orders are lifted.
“The cost control programs are temporary, while the pandemic persists. The restructuring programs are permanent,” chief executive Mark Barrenechea told analysts in a conference call.
“Our corporate offices, our centres of excellence, innovation centres and country head offices will remain open, when we are able to do so,” Barrenechea said.
He said the permanent closures will be at smaller offices and will affect about 15 per cent of the total workforce. About 95 per cent of employees has been working from home because of the pandemic.
The company, headquartered in Waterloo, Ont., estimates that the restructuring program will cost from US$80 million to US$100 million by the time it’s completed at the end of fiscal 2021.
Once completed, OpenText said it anticipates annualized cost savings of approximately US$65 million to US$75 million.
Barrenechea said the actions announced Thursday are pre-emptive and in anticipation of COVID-19’s impact on industries it serves.
“We will come out of this stronger than we went into it,” said.
The company, which operates in multiple countries and reports in U.S. currency, announced the restructuring with its financial results from the fiscal third quarter ended March 31.
The quarter included a 13.3 per cent increase in revenue, which rose to $814.7 million from $719.1 million.
However, OpenText’s net income was down 64.3 per cent to $26.0 million or 10 cents per share, and adjusted earnings were down 4.7 per cent to 61 cents per share.
Story by David Paddon – The Canadian Press
Despite the challenges, Edmonton area real estate values 'have held up extraordinarily well' – Edmonton Journal
I have to say the Edmonton area real estate market has surprised me.
When you consider the onslaught we have had in the past five years — oil price crash, more than 100,000 job losses, fires, floods, domestic and international trade disputes and then COVID-19, I would say the Edmonton and area real estate values have held up extraordinarily well.
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Since 2014, we’ve only seen modest declines in prices, with single family homes declining the least. Edmonton remains Canada’s most affordable major city with one of the highest average incomes.
Other Canadian cities have seen significant price gains in the same time period creating a bigger difference in real estate values between regions. We have had clients who can work anywhere and chose Edmonton as they can afford much nicer living quarters here for the same money.
Given the lower prices and interest rates combined with rising rental demand, it is easier for investors to get positive cash flows. We are seeing investors looking at condos for their positive cash flow. This fact will help to support our real estate values.
Toronto and Vancouver Real Estate Inventory May Get A Boost From AirBNB Slowdown – Better Dwelling
Canadian real estate markets may be getting another inventory headwind soon. National Bank of Canada (NBC) research estimates AirBNB hosts may contribute to oversupply later this year. As the slowdown impacts hosts, many may be incentivized to sell. By their estimates, just a quarter of hosts selling would cause inventory in cities like Toronto and Vancouver to swell.
AirBNB and Housing Inventory
AirBNB helps homeowners take existing housing stock and convert it to short-term rentals. Rather than staying in hotels, travelers can now stay in existing non-hotel stock. At first, it wasn’t a big issue when just a few people were doing it. As the platform expanded, people began buying additional housing just to operate short-term rentals. By repurposing housing that would otherwise be long-term units, cities now need additional housing. Basically, short-term rentals lead to an inventory squeeze, pushing rents and prices higher. Temporarily at least, for as long as the squeeze persists. That squeeze could end as quickly as travel did.
The Travel Industry Expects A Big Slowdown
The travel industry doesn’t expect travel to recover quickly from the pandemic. The US has approved some routes cutting plane traffic up to 90% until September. The IATA, the trade association for international airlines, also doesn’t see traffic returning to 2019 levels until at least 2023 – at the earliest. What does this mean? Fewer users of short-term rentals, and more competition from hotels for those travelers. All of this can have a big impact on real estate inventory, according to NBC numbers.
Canada’s Biggest Real Estate Markets May See Inventory Spike
If just a quarter of AirBNB inventory is sold off, NBC sees a lot more real estate listings on the market. In Vancouver, the bank estimates real estate listings would rise 12%. Montreal would see an increase of 27% in resale listings. Toronto is another story though, with inventory forecasted to rise a whopping 34%. That’s with just 25% of AirBNB exiting as hosts.
AirBNB Boost To Canadian Real Estate Inventory
The potential increase in real estate listings if 25% of AirBNB properties were listed for sale.
Source: National Bank of Canada, Better Dwelling.
The boost is another headwind for inventory rising later in the year. Inventory was already expected to rise in the coming few months. NBC economists believe this would be “exacerbating oversupply in the coming months.”
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How Is The Real Estate Market In Muskoka Post COVID19 – Hunters Bay Radio
In a brand new video podcast series, Gerry Lantaigne with Sutton Group – Muskoka Realty discuses the world of real estate in Muskoka during the Coronavirus pandemic.
Join Gerry every month as he updates you on The State of Real Estate
Watch the inaugural episode here:
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