Restructuring rise and layoffs loom? What can you expect in 2014

Restructuring rise and layoffs loom? What can you expect in 2014

Restructuring rise and layoffs loom? What can you expect in 2014

Restructuring and layoffs have been top of the news cycle for months, but does that reflect the Canadian labour market, or are these the unfortunate exceptions?

A recent HRM poll finds 61% of readers will be hiring in the new year, compared to just 11% expecting their workforce to shrink. More than a quarter (27%) predict stability in the new year with neither hiring nor firing on the table.

It’s a more optimistic result than a recent ManPower survey, which found 13% of employers planned to increase their payroll next year, compare to eight per cent expecting cuts. Those who are hiring will likely outpace the cuts to a total increase of 12%, a two percentage point increase compared with the last survey.

That overall gain is good news in a month when a number of large restructuring announcements across the country are front of mind for those looking at trends. Yesterday Canada Post announced it would be cutting 8000 jobs over the next five years as it reduced service around the country.

Sears, Potash Corp and Kellogg all announced closures and layoffs, while BMO reported staffing cuts of the equivalent of 1000 full time employees. In combination, these cuts leave more than 3000 people facing unemployment as they start the holiday season.

Conference Board of Canada economist Julie Ades told HRM that the cuts reflect a range of different factors for different industries, with retailers facing stiffer competition and Potash Corp’s seeing demand soften and product prices decline while BMO said the cuts were an “effort to reduce expenses and make overall operations more efficient”.

“Each set of layoffs resulted from specific factors,” Ades said, adding that overall this year job growth had been much slower than in 2012. The average growth was 13,400 jobs per month in 2013, compared with an average of 25,000 jobs gained each month last year.

“Slow domestic demand and uncertainty on the global stage may account for some of the weakness in growth,” Ades said. As debt increased and government spending decreased, domestic demand could no longer maintain the Canadian economy, but export industries had not been able to make up the difference.

“The shift to exports is taking a little while because of uncertainty at the global stage. This could affect employers’ willingness to hire in Canada,” she said. “For 2014 the outlook should be brighter. Overall soft domestic demand will continue to provide downward pressure on employment growth in the near term, but if you look further ahead stronger exports and straightening residential and non-residential investment will support better job gains next year.”

Is your company planning restructuring in the New Year? How are you preparing your employees?