Canadian companies begin laying off thousands of employees in first wave of pandemic job losses

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Canadian companies are laying off thousands of employees in what’s expected to be the first wave of massive job losses as global demand dries up and businesses shut down because of the novel coronavirus.

Fiat Chrysler Automobiles said on Thursday it is laying off 8,900 workers in Canada because of a pause in production, while Cirque du Soleil Entertainment Group temporarily laid off most of its work force, 4,679 people.

Layoffs, salary, EI and more: Your coronavirus and employment questions answered

The Big Three automakers announced temporary closings of all North American plants on Wednesday. General Motors and Ford are also halting production through the end of the month, including in Canada. Unifor, which represents auto workers, said the closings throw “thousands of Canadian Unifor members out of work” and urged the manufacturers to continue paying them.

Auto parts supplier Magna International Inc. is temporarily suspending production at many of its manufacturing facilities around the world, with the exception of China, and will re-evaluate week-to-week. The company said many of its customers have paused production in Europe and North America. Magna’s operations span 27 countries, and include 346 manufacturing plants.

Restrictions on large public gatherings mean Cirque is unable to put on shows. The job cuts affect 95 per cent of the company’s employees, and include 1,373 staff at the Montreal head office.

“It’s quite dramatic when you think that a week ago I had 44 shows in production, and within a week – mainly 48 hours – we have to shut down all of our shows,” president and chief executive officer Daniel Lamarre said in an interview. “If I want to protect jobs for the medium- to long-term, I have no choice but to proceed to layoffs.”

Cirque will continue to pay for insurance for employees, and arranged and paid to fly some 2,000 employees to their home countries. “I had a full team working day and night to make sure that each single employee could be repatriated,” Mr. Lamarre said.

He said Cirque is looking for support from the provincial government to help all businesses, and that he’s been in talks with Pierre Fitzgibbon, Quebec’s Minister of Economy and Innovation. Still, the company could reopen its show in China by the end of April. “I feel like I’m on a mission right now,” Mr. Lamarre said. “We will move to the next phase, which is [thinking about] when we’re going to go back to business.”

Irving Shipbuilding Inc. suspended industrial operations at Halifax Shipyard and two other facilities on Thursday for three weeks, and said 1,373 of its 1,800 employees will be temporarily laid off. Unionized employees will be paid for the week of March 23.

Economists are warning the layoffs could just be the beginning. “This is going to be very, very bad,” said Kevin Milligan, economics professor at the University of British Columbia. “My best guess is that we are very likely to do worse in March, 2020, than the worst month in the 1930s.”

University of Calgary associate professor of economics Trevor Tombe has said Canada’s biggest drop in employment for a single month during the Great Depression was 2.5 per cent.

The pandemic has devastated the hospitality industry since governments restricted travel and urged people to stay home. “It is catastrophic,” said Tony Elenis, president of the Ontario Restaurant Hotel and Motel Association. “Even some of the larger hotels we know of are debating between keeping the doors open or closed.”

Hundreds of hotels have shut down temporarily and the layoffs number in tens of thousands, said Susie Grynol, president of the Hotel Association of Canada. “The hotel industry completely crashed over the last 10 days,” she said. Those that are still open have skeleton crews and less than 10-per-cent occupancy. “Everyone is being impacted,” she said. Ms. Grynol expects most hotels will close before the pandemic ends, meaning between 200,000 and 250,000 jobs could be lost.

Germain Hotels, based in Quebec, shuttered five of its 18 properties across Canada and laid off employees, although it did not specify how many. “Our greatest wish is that the world recovers health so that ultimately our employees find their jobs back,” co-founder Christiane Germain said.

It will take weeks before Canada has statistics showing the impact of the pandemic on employment. Statistics Canada publishes data monthly, and its next Labour Force Survey is not due until April 9. It will be based on surveys conducted March 15-21, meaning it will provide a snapshot of a week in which the COVID-19 crisis took a much darker turn for many workers.

Canadian airlines have already cut jobs. Holiday carrier Sunwing Airlines Inc. is halting flights after March 23, and issued layoff notices to 470 pilots. Air Transat said on Wednesday it will suspend service until April 30 and lay off employees temporarily. Hours or salaries for others will be reduced, and the company said the moves will affect a “significant portion” of its work force.

Porter Airlines is halting all flights starting on Friday and will resume on June 1. Most of the airline’s 1,500 employees will be affected, spokesman Brad Cicero said.

Some major retailers are still paying staff for scheduled shifts even after closing stores. Indigo Books and Music Inc. is shutting all of its retail locations and will pay employees until March 27, when it plans to reopen. Gap Inc. is also continuing to pay employees after closing its stores in North America.

Freshii Inc., which has 470 restaurants in 16 countries, temporarily laid off some employees at head office without pay and moved others to a four-day week and cut their salaries by 20 per cent, according to a memo obtained by The Globe and Mail. The measures at the Toronto-based company will be in place for at least 30 days.

Layoffs have hit the tech industry, too. Legal software and services firm Dye & Durham of Toronto has laid off 20 per cent of its 280 employees and asked the rest to take a 20 per cent pay cut through June 30, CEO Matthew Proud said. “We think a storm is coming, and we just want to make sure we’re in the best position to weather it,” he said, adding he will work without pay over that period.

With a report from Nicolas Van Praet

Editor’s note: A previous version of this story incorrectly stated that Cirque was laying off 1,100 of its employees, it is in fact laying off 1,373

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