Layoffs hit more sectors, marketing departments

Freshii, Reitmans and Lush are the latest companies to lay off staff in response to store closures and slipping sales.
Reitmans_Store

As more companies close in response to government mandates and their own public safety concerns, it has resulted in thousands of employees – both in retail and the front office – receiving temporary layoff notices in recent days.

While still allowed to operate ecommerce channels amid closures, several “non-essential” retailers in Canada have taken a significant hit to sales, resulting in the need to temporarily lay off staff they can no longer afford to pay as closures extend beyond the two weeks many had initially anticipated.

After closing its 587 stores across Canada on March 17, Reitmans laid off 90% of its retail workforce as of Sunday, with layoffs for 30% of its head office staff coming into effect on Monday. The company employs about 7,000 staff in Canada across its head office and retail banners, which also include Penningtons, Addition Elle, RW&CO and Thyme Maternity.

Reitmans confirmed to strategy that some of the front-office layoffs were in the marketing department, but could not say how many or which banners they worked on. It also could not comment on if any advertising or marketing activity has been suspended due to its store closures, but did confirm that what it was running had been shifted to exclusively focus on ecommerce channels, as its Montreal distribution centre has been allowed to continue operations.

On Saturday, Lush said it would lay off an undisclosed number of staff, now that store closures are extending for an undetermined amount of time (the company had previously pledged to continue paying employees during the initial shutdown). The company said retail and manufacturing managers were staying on to keep the company prepared for when regular operations could resume. Where possible, it also offered temporary layoffs in order to allow some employees to receive benefits from both Lush and government relief programs. Senior leaders at the company have also taken a 25% pay cut.

Indigo, which had previously closed its stores from March 17 to 27, has now said those stores will remain closed “until further notice,” and would be laying off 5,200 of its retail staff, a significant portion of the 7,000 it employs nationally.

Last week, Leon’s announced it would close 72 of its stores and lay off 3,900 staff across its furniture and appliance banners, representing roughly half of its workforce.

While still allowed to operate, brands in the restaurant and QSR business have also been forced to make cuts, as moving to delivery and take-out has either dramatically impacted sales or reduced the need for certain staff.

On Monday, Freshii announced it had temporarily “streamlined its head office workforce” to cut costs. Earlier this month, the company said “hundreds” of in-store staff had been laid off, as locations either changed operations or closed outright.

Boston Pizza announced on Friday that it was laying off approximately half of its 192 corporate staff due to a significant decline in business caused by COVID-19. Though the company did not say how many restaurant staff were impacted, it did say that nearly all of its 400 locations in Canada had to make layoffs as they’ve moved to a crew of kitchen and delivery staff only. Some individual franchisees have also opted to close altogether.

B.C.-based restaurant chain White Spot has laid off 3,000 workers between its 130 corporate and franchise locations, some of which have closed permanently.

All of the companies mentioned above also expressed the hope that these layoffs would be temporary, and would look to hire as many back as possible once operations returned to normal.

The most recent layoff announcements are just the latest as COVID-19 has forced businesses across sectors to drastically alter or halt operations this month. Airlines in Canada have laid off the majority of their frontline staff and pilots. Most major automakers with manufacturing located in Canada – including Ford, Toyota, FCA and General Motors – previously announced layoffs as a result of suspending automobile production. Cineplex laid off all 11,000 of its part-time staff following its theatre closures.

Despite these layoffs, other businesses that remain open are hiring new staff due to the extra work associated with cleaning, stocking stores and keeping up with demand for delivery and click-and-collect. Earlier this month, Sobeys pledged to work directly with Freshii and Cineplex to hire staff those companies had laid off. Walmart Canada also plans to hire 10,000 staff across the country to meet demand during the pandemic, and have since been joined by the likes of Loblaw, Dollarama and Domino’s Pizza.