Sears Canada cuts 245 jobs, some work moves overseas

Sears Canada is cutting 245 jobs, mostly at its head office in Toronto, and moving some of the work overseas.

Majority of job cuts come at head office in Toronto

Sears cuts 245 jobs

9 years ago
Duration 3:01
IT jobs in Toronto, Montreal and Belleville, Ont., will be outsourced

Sears Canada is cutting 245 jobs, mostly at its head office in Toronto, and moving some of the work overseas.

The reductions will affect 138 of the jobs in the retailer's information technology department, 99 in finance and eight in payroll.

About 200 of the cuts are in the Toronto area, 38 are in Montreal and six in Belleville, Ont.

Sears said the workload will be transferred to "external third-party providers whose business expertise includes updated systems and processes that can more efficiently perform the work involved."

While the company didn't provide a specific breakdown on how the work will be re-assigned, spokesman Vincent Power said a "contingent of workers" will be in Canada while the majority of the IT work is expected to be done in the Philippines and the majority of the finance and payroll work in India.

"They have invested in systems that are core to the services their businesses provide, and that would require Sears to invest in areas that are not core to its retail business," Powers said in an email.

"Instead, Sears can focus its investments on core retail priorities such as better product offerings, updated visual presentation standards, improvements to stores, e-commerce and marketing techniques."

Employees were notified of the cuts Monday and will leave during the next three to six months.

Shares drop

Shares in the company dropped close to six per cent on the news, falling 73 cents to trade at $12.27 on the Toronto Stock Exchange Tuesday afternoon.

Sears Canada let go 700 workers across the country earlier this year in a bid to "right-size" and restructure its business. About 360 of those jobs were from its department stores, and another 300 from the distribution centres. The remaining cuts were to head office and other support areas.

Douglas Stephens, a retail analyst and president of The Retail Prophet, says Sears Canada seem to be "on life support."

"We’re not seeing anything coming out of Sears to turn this around. If they were saying ‘We’re letting 250 people go but that’s part of our game plan to get lean turn around our marketing and improve our stores,' but I’m not hearing that here," he said.

Stephens says the periodic layoffs seem to be a "distress call" geared to wooing any potential buyers.

The company, which reports its second quarter results Wednesday, has faced years of declining sales, as well as tough competition from discounters and online stores. Earlier this year, it had to contend with the entry of U.S. discount chain Target into the market.

Canadians have reacted angrily to outsourcing in the past, with Ottawa making changes to its rules on foreign workers after the Royal Bank of Canada drew criticism in the spring for cutting Canadian jobs after contracting a supplier to provide IT assistance, which brought in foreign workers to fill them.

RBC chief executive Gord Nixon later apologized for the incident.

People in B.C. also lashed out against that provincial government's support for Chinese-owned HD Mining's plan to use temporary foreign workers at a proposed coal mine in Tumbler Ridge. The company had argued that temporary Chinese workers were necessary because of a lack of Canadian training in their specific work.

The federal government announced initial changes in April, scrapping an aspect of the program that allowed employers to pay foreign workers as much as 15 per cent less than the average wage for a job.

Earlier this month, it further tightened rules, saying it will charge employers $275 for each application they make and announcing additional restrictions focused on what language proficiency employers can request, as well as broader requirements to advertise job openings.