Communications giant Telus has committed itself to shedding 6,000 jobs while inflation in Canada persists, making products more expensive than ever.
The inflation rate in Canada fell to 2.8% in June of 2023, the lowest since March of 2021 from 3.4% in the previous month and below market expectations of 3%, as gasoline prices declined further.
The Bank of Canada is wanting 2%.
Transportation costs fell by 3.4%, extending the 2.4% decline in the previous month amid a 21.6% slide in the price of gasoline. On the other hand, food inflation remained steady at 8.3%, lifted by a 9.1% increase in the cost of groceries.
Also, soaring interest rates from the Bank of Canada (BoC) pinned the increase in mortgage interest costs (30.1%) and lifted shelter inflation to 4.8%. The core trimmed-mean rate, which is closely watched by the BoC, fell less than expected to 3.7%.
On a monthly basis, the headline CPI edged 0.1% higher.
As for Telus, financial markets data firm Refinitiv says Telus had 108,500 workers at the end of last year.
The cuts were made with “a very heavy heart” and prompted by the “evolving regulatory, competitive and macroeconomic environment,” said Darren Entwistle, the company’s president and chief executive.
“Against the backdrop of rapid transformation in our industry and the ways in which our customers want to engage with us, today we are announcing a significant investment in an extensive efficiency and effectiveness initiative across Telus,” he said in a news release.
He added that Telus is also offering early retirement and voluntary departure packages, but also establishes the company’s need to free up cash flow and remain competitive.
The cuts involve 4,000 positions at its main Telus business and 2,000 at Telus International and include offers of early retirement and voluntary exits.
Donna Hokiro, president of United Steelworkers Local 1944 in Edmonton, said in an interview that unionized workers have had enough.
“Why do these companies do it? Because they can. We don’t have strong enough government regulations against it,” she said.
“We have repeatedly lobbied and we will continue to do so, that companies like Telus and others should not be given lucrative government contracts when there are no strings attached.”
Canadians can expect the quality of service they receive from Telus to drop as a result of the job losses, according to Hokiro, the union leader.
“With the cuts you see, with the clerical cuts … darn tootin’ you’re going to notice a difference.”
The restructuring will cost Telus $475 million in 2023 and lead to annual savings of more than $325 million, the company said.
Its plans to reduce its workforce were announced at the same time as the company revealed its second-quarter net income fell almost 61% from the same period last year to $196 million.
The company’s net income amounted to 14 cents per share for the quarter ending June 30 compared with 34 cents per share in the same quarter a year earlier.
