Canada is about to see the largest wave of job losses since the closure of Sears Canada, with its oldest company, Hudson’s Bay, set to close all its stores on June 1, marking the end of an era.
The 355-year-old company said in a court document filed Monday evening that it will have terminated about 8,340 employees — approximately 89 per cent of its current workforce — by Sunday when it completes the liquidation of more than 80 stores across the country. Another 899 employees will lose their jobs around June 15, with some 120 staying on to assist with the final wind-down of the retail giant.
The last time Canada saw layoffs on this scale was in 2018, when Sears Canada shut down more than 100 stores nationwide, putting 12,000 people out of work — many of whom also faced deficits in their pension plans.
“It is really sad. I don’t have any words to comfort anyone,” said Hazel Harris, 60, who has poured her “blood and sweat” into the Hudson’s Bay e-commerce distribution centre in Scarborough, where she hoped to retire.
“What do I do now? How am I going to put keep the roof over my head?” said Harris who was laid off on May 1.
The Canadian retail icon, saddled with more than $1 billion in debt, filed for creditor protection under the Companies’ Creditors Arrangement Act (CCAA) in early March. While the company made last-minute efforts to find a buyer or investor to save its business, it has concluded that no part of its operations can be salvaged, according to a court document filed Monday.
“It was necessary for the Company to make the difficult decision to significantly reduce employee headcounts to align with the winddown of the liquidation sale and rolling closure of store locations and required employee positions,” the court document read.
Hudson’s Bay has told employees they will not receive severance pay at the time of termination and has ended several benefits since the liquidation began, including pension payments to some former senior executives and post-retirement health and dental benefits for 2,000 retirees.
The defined pension contribution and defined benefit pension for most retailer’s employees are sufficiently funded.
“We feel very sad, very aligned with the employees and very much attuned to their concerns,” said Susan Ursel, whose law firm Ursel Phillips Fellows Hopkinson, was appointed to represent Hudson Bay’s employees and retirees. The firm has created a webpage to update workers.
“We’re working very hard to find every means of alleviating their loss of employment.”
The only piece of reassuring news for Hudson’s Bay employees is that the retailer will apply to the court next Tuesday to declare that it meets the criteria for the federal Wage Earner Protection Program (WEPP), which would trigger employees’ entitlements to benefits under the program.
WEPP provides a one-time payment of up to seven weeks of insurable earnings, up to a maximum of $8,844 to employees whose former employer has filed for bankruptcy or protection under the CCAA, said Ursel.
Ursel added that her law firm is “negotiating very hard” with Hudson’s Bay about a hardship program that will provide monetary assistance to current and former workers who are in financial distress.
On Tuesday, the massive Scarborough distribution centre sat in eerie silence — rows of shelves stood empty, and conveyor belts that once hummed with activity were now lifeless.
Outside of the building, Unifor, which represents about 600 Hudson’s Bay employees, organized a rally to call on federal government to reform the insolvency laws to better protect workers’ wages and benefits.
“Unifor is demanding that HBC pay all owed severance and unpaid wages, protect pensions and benefits and treat its workers with the dignity and respect that they have earned,” said Nena Bogdanovich, Toronto area director of Unifor.
“This is about justice. This is about fairness. We’re not backing down,” she said.
While workers are owed thousands of dollars in severance, Harris said some might not even have enough qualifying hours to receive employment insurance, as the distribution centre went through multiple layoffs and recalls over the past year.
Ursel said employees, along with nearly 1,900 other unsecured creditors, will find out if there’s money left over after Hudson’s Bay sells off as many of its assets as possible and makes priority payments to secured creditors — Bank of America, Pathlight Capital, Restore Capital and Cadillac Fairview.
“It’s a long-standing feature that employees have been treated at the bottom of the list of creditors,” she said, despite recent federal efforts to streamline WEPP following Sears Canada layoffs.
Hudson’s Bay will also seek court approval next Tuesday for the sale of its intellectual property — including its logo, name, and iconic multicoloured stripes motif — to Canadian Tire in a $30 million transaction.
Hudson’s Bay said its board of directors, after careful consideration and consultation, determined that the bid submitted by Canadian Tire was “the most favourable” among the 13 offers it received for its intellectual property.
The Star first reported last Friday that the department store chain had signed a deal with Weihong Liu, a B.C. shopping mall owner, to reassign 28 store leases in Ontario, Alberta, and British Columbia. The reassignment of leases is conditional on consent from the landlords or approval by the court.
