Analysts warn more companies will layoff staff as Canadian Tire cuts employees

Canadian Tire has announced it is cutting three per cent of its workforce, citing tougher economic times. (Natalie van Rooy/CTV News Ottawa)

The holiday shopping season is just around the corner but there are signs that the economy is in a downturn. Consumers are reducing their spending and major corporations are making cuts. Canadian Tire Corporation has announced it's cutting three per cent of its workforce, citing tougher economic times.

"You are going to start seeing more consumer-facing companies laying off staff whether they’re retail or even some brands that sell to retail because consumers are at a very difficult time right now," said Bruce Winder, a retail analyst.

Customers are stretched thin and shopping for only the essentials ahead of the typically bustling holiday season.

"We have adjusted our spending," said Kathy Skelly, an Ottawa resident. "We are starting to look at different bargaining, couponing, and looking at different places for better value, I think everyone is in the same position right now."

Inflation, skyrocketing living expenses, and increased food prices are all contributing to the crunch.

Diners are also starting to avoid higher-end restaurants where the entrée prices are up against their budget.

"I had to because working and being a full-time student, it’s hard," said Kimberely Mamarl, an Ottawa resident. "Bills included, I had to balance between do I really need it or do I just want it."

Looking for a job this holiday season may also be tougher than usual. Canadian postings for seasonal holiday jobs are down 30 per cent from a year ago, according to Indeed, amid a softening labour market. Despite that, they’re up 18 per cent from pre-pandemic levels. Indeed says the slowdown is likely related to industry-specific trends like e-commerce and remote work. Holiday job postings are usually for the retail sector.

"I think we are headed for a downturn here, we are really close to being in a technical recession," Winder said. "You probably will start seeing more companies laying off staff because they have to lower their cost to offset the sales and gross profit decrease from selling more essentials."

Meanwhile, deputy prime minister and finance minister Chrystia Freeland will be presenting an updated picture of Canada’s finances on Nov. 21, with the 2023 fall economic statement.