In September, the Royal Bank of Canada (RBC) made a round of job cuts in its capital market operations, with plans to cut two per cent of its full-time equivalent staff in the coming quarter. The bank had 93,753 employees as of July 31.
But the rationale behind the layoffs isn’t necessarily the same for all institutions.
For instance, Scotiabank says bank digitization, automation, streamlining efforts and shifting consumer preferences are driving its layoffs. Meanwhile, RBC’s planned cuts come as a cost-saving strategy following the weight of high expenses in the third quarter.
Coming amid a year of high inflation, the layoffs are likely a domino effect of the aggressive interest rate hikes from the Bank of Canada, according to Jay Zhao-Murray, FX analyst at Monex Canada, a commercial foreign exchange firm.
“In the face of consumers spending less, you’ve got firms that have this weaker sales outlook, so they’ve decided to slow their employment intentions, as well as cut back on investments,” Zhao-Murray said in a phone interview with CTVNews.ca.
“When you take a look at banks, you have this weak demand, especially in interest-rate sensitive goods, and that affects loans. On the business side, there are reduced investments. All of these things come together to weigh on profitability.”
Despite the recent layoffs, he’s doubtful these job losses will be permanent.
“It really is a cyclical thing. We’re at the tail end of the economic cycle in Canada. With slowing demand, there’s a greater potential for a recession next year,” he said.
“It’s just more or less the normal swings that come in the business cycle. Even though profitability has been eroded, companies are still earning a higher rate of profit now than they were during the entire five-year period preceding the pandemic,” Zhao-Murray added. “With the higher profits, firms don’t necessarily need to fire workers and I don’t think they want to.”
Following the firing-and-hiring challenges during the pandemic, firms are now trying to hoard labour and not make layoffs until absolutely necessary, he adds.
And according to Nita Chhinzer, associate professor in human resource management and business consulting at the University of Guelph, layoffs were often used in the past as a result of firms experiencing declines, such as a loss of customers or profit.
But today, layoffs are often used by employers who are reporting profit.
“Instead of training and developing employees, some employers use layoffs as a tool to change the skills composition of their workforce, since it is quicker than training and redeploying employees,” Chhinzer told CTVNews.ca in an email.
For the banking industry, factors such as rising interest rates and less than favourable third-quarter results are leading to cuts to the workforce.
For instance, the bad debt provisions of Bank of Montreal (BMO) more than tripled to $492 million by the end of July 2023, compared to 2022.
And the quickly changing banking environment may be contributing to the recent uptick in layoffs, Chhinzer said.
“The move from in-person to online support shifts the skills needed from workers. Clients require 24-7 access and response, meaning everyone from customer service to tech support needs to shift when they work. Improvements in AI and chatbots requires fewer workers for some types of jobs,” she said. “I expect that we will see more layoffs as banks continue to evolve to their internal and external pressures.”
Chhnizer also has some advice for improving job security.
“The shift has occurred where employees are increasingly responsible for their own career outcomes and I highly recommend that people keep active with keeping their skills and competencies up to date,” she said.
“Whether it’s free courses from edX, Coursera, or Class Central, or microcredentials from LinkedIn or Microsoft, keeping your skills current and communicating that to your employer is one way to signal that you are adaptable and transferable for other roles.”
VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.
The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.
The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.
The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.
The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.
MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.
In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.
“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.
“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”
In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.
“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.
The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.
“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”
The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.
The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.
A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.
This report by The Canadian Press was first published Nov. 9, 2024.
The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.
Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.
Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.
Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.
“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.
“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”
Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.
“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.
Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.
“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”
But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.
Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.
“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.
Paddon said the initiative is a great idea, but she would like to have known more about it.
The legion also sells a larger collection of items at poppystore.ca.
This report by The Canadian Press was first published Nov. 9, 2024.
