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Tim Hortons Layoffs To Hit Many At HQ, Regional Offices: Report

Tim Hortons is planning mass layoffs at its headquarters and regional offices following its tie-up with Burger King, the Financial Post reports, citing “sources familiar with the matter.”

The unconfirmed report suggests many departments’ staff could be reduced by half or more.

“We have a year-end celebration this weekend, so they are going to wait until after that,” an unnamed source told the Post. “There is talk of departments of 120 going down to 40 people. Cutting all departments in half is the direction, but some will be worse than that.”

That squares up with warnings from the Canadian Centre for Policy Alternatives (CCPA), which last fall predicted a reduction in staff of 44 per cent at Tim Hortons’ regional offices and headquarters, or about 700 layoffs.

Tim Hortons’ new owner, Brazil-based 3G Capital, owner of Burger King, will need to make the cuts to manage the debt it took on buying Tim Hortons, the CCPA report predicted.

"Without additional strong assurances from 3G Capital that no jobs will be lost ... this may not be in the net benefit of Canada," CCPA senior economist David Macdonald said.

Industry Canada approved the takeover in December, in part on assurances that Tim Hortons would maintain employment levels at franchises. But the commitment extended only to maintaining “significant” job levels at Tim Hortons HQ and regional offices.

Besides its headquarters in Oakville, Ont,. Tim Hortons has regional offices in B.C., Alberta, Kingston, Ont,. Quebec, Nova Scotia and Ohio, the Post reports.

The newspaper says “tensions have run high” at Tim Hortons headquarters in Oakville since 3G Capital execs started moving into the offices last month. Two senior executives, including the new head of the company’s U.S. division, resigned within weeks of the new execs’ arrival.

In its report, the CCPA noted that 3G Capital has a track record of stripping assets from the companies it runs in order to fatten profit margins.

The report suggested the newly formed company could also shuffle numbers around to reduce its tax burden in Canada, a move that could cost governments $355 to $667 million in lost tax revenue.

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