Cirque du Soleil’s Zarkana production in 2011Richard Termine
The tent over the Cirque du Soleil is sagging under the weight of a strong Canadian dollar and the fallout from the global recession.
The entertainment juggernaut is laying off 400 employees and cancelling shows as it implements a major restructuring to rein in costs.
Most of the job cuts will take place at the Montreal headquarters, home to 2,000 of the company's 5,000-strong global work force.
"The Cirque is going through a difficult period but not a difficult financial period," spokeswoman Renée-Claude Ménard said Wednesday at the company's Montreal headquarters. She noted that the company achieved record revenue of "nearly $1-billion" over the past year and sold 14.2 million tickets to more than 20 shows around the world.
"Basically we're lucky that with a very difficult economic and financial situation we're still pulling a rabbit out of the hat," she said.
In addition to runaway expenses associated with its rapid expansion, the company is facing a shortage of outside investors in its production and ongoing difficulties caused by the strength of the Canadian dollar.
The company incurs 95 per cent of its expenses in Canada and 95 per cent of its revenue elsewhere, Ms. Ménard said.
"Each one-cent increase in the dollar has a $3-million impact on our profits," she said.
The company, founded almost 30 years ago by stilt-walker Guy Laliberté and fellow street buskers, also announced Wednesday it is closing four shows to trim expenses.
"We would have been much happier to tell you those shows weren't closing," Ms. Ménard said. "But it's not a revenue issue, it's an expense issue."
There are 19 Cirque du Soleil productions playing around the world, including seven shows in Las Vegas.
The Cirque has been expanding at a furious pace in the past few years and needs to make some changes in every aspect of its operations, from management offices to the design and staging of shows, Ms. Ménard said.
Mr. Laliberté and president and chief executive officer Daniel Lamarre spent part of Wednesday announcing the layoffs and restructuring to employees at head office, she said.
The job cuts are set to begin at the end of this month and continue until the end of March, she said.
The chill experienced by the Cirque is being felt by cultural enterprises across Canada, according to Janice Price, head of Toronto's annual Luminato Festival.
"Everyone has been feeling the impact of this economy," Ms. Price said, citing "event saturation and audience attrition."
But few observers expect Quebec's powerhouse entertainment exporter to fold its tent any time soon.
"They'll find a way to get back on their feet and do things differently," said Professor Louis Patrick Leroux of Concordia University, head of the Montreal Working Group on the Circus. "I'm confident of that."
The success of the Cirque du Soleil has been so spectacular over the first three decades of its existence that the slightest tremor makes an outsized impact, according to Prof. Leroux.
"With the Cirque du Soleil we think of a continuous, seemingly inevitable success story – dazzling and risk taking," he said.
"But it can't go on forever, especially with the state of the American economy."
Like other observers, Prof. Leroux said that the constantly expanding operation became too scattered, "with too much activity, too many shows all over the place," and is currently suffering from "collective exhaustion."
He is also concerned that Wednesday's announcement did nothing to address the state of the Cirque's legendary creative impetus, saying he was "surprised and disappointed that Guy Laliberté and Daniel Lamarre have not offered any renewed artistic vision."
Without that, Prof. Leroux warned, the company faces continued decline.
"I don't think the situation is dire," he said. "They'll find a way out of it as long as the response is more than strictly administrative."
Bertrand Marotte