TORONTO—Laid-off retail workers, including more than 17,000 hit by Target’s decision to pull out of Canada, face grim job prospects as they dust off their resumes and start looking for work, according to labour experts.
“I suspect they are feeling some anger and some very genuine fear,” said Brock University labour expert Kendra Coulter, noting that many retail sector staff work only part-time hours.
“Many of them will not be eligible for employment insurance and are facing a very scary future.”
Target Corp. announced last week it would close all 133 locations in Canada less than two years after the U.S. discount retail giant made its foray north of the border by taking over former Zellers locations.
Angella MacEwen, senior economist at the Canadian Labour Congress, says it could take between six months to a year for the employees to find replacement work, particularly given the cyclical slowdown in the retail sector during the post-holiday season.
“January and February is not a great time to be looking for work, and with a whole bunch of people at the same time flooding the labour market, there are a lot of people who are going to be out of luck,” MacEwen said.
Workers affected by Target’s exodus from Canada are likely to struggle to pay the bills while they look for their next job, MacEwen said.
“These are minimum wage jobs, and a lot of Canadians in that position are living paycheque to paycheque and can’t really go six months without regular pay,” she said.
“It’s looking like it’s going to be a significant struggle for these workers and their communities, although over time they will be reabsorbed. They will be able to find work eventually.”
Target Not Alone in Closing
Target is not the only retailer to close stores and lay off workers in Canada recently. Clothing retailer Mexx declared bankruptcy last month and will be closing all of its stores, including 170 in Canada. The company employs 2,800 people worldwide. Meanwhile, Sony plans to close its 14 remaining Canadian locations, a move that will affect 90 employees.
The retail cuts come as the broader economy also faces challenges including cuts in the oil patch.
Statistics Canada said the economy lost 10,700 jobs in November and another 4,300 jobs in December as gains in full-time employment failed to keep up with the losses of part-time jobs.
The two months of losses followed big gains of 74,100 and 43,100 in September and October, respectively.
Jackie Ross at retail recruitment firm JRoss Recruiters says retailers, who are facing reduced foot traffic to their stores due to the growing popularity of online shopping, are likely to be conservative about hiring.
However, some of the laid-off workers at Target will be able to move to other service sectors that face staff shortages, such as the hospitality and restaurant industries, said Ross.
“There are other service industry sectors that are still clamouring for employees in their labour force,” she said.
Target Canada’s U.S. parent has set up a $70 million trust fund to cover employees’ severance payments. The company said most workers will receive 16 weeks’ pay.
But Lee Harbinson, an employee at the discount retailer’s Pickering Town Centre location, says it’s not a real severance package, as many employees will still be working during those 16 weeks, as the discount chain winds down its operations.
Harbinson, who works part-time unloading trucks and stocking the clothing section, said he wasn’t surprised by the news, as he had watched sales languish for the nearly two years he worked at the store.
“I’m not in panic mode just yet,” Harbinson said. “I saw this coming from a mile away.”
Harbinson, who also works as a freelance photographer, is taking stock of his options and isn’t planning to pursue another retail job. Going back to school is a possibility, says Harbinson, who used to work in an ad agency before the recession hit.
“Retail will be a last resort for me,” he said.
Sears Canada is encouraging Target workers to check its website this week for information about job fairs. It’s also offering its employee discount to Target Canada workers for 16 weeks starting Wednesday.
The retailer let go about 700 workers in January 2013, including 300 from its department stores, and later closed its flagship location in Toronto’s Eaton Centre as well as four other stores, affecting another 1,000 employees.
It was the same time electronics retailer Best Buy Canada estimated 900 jobs would be lost as it closed some of its Future Shop and Best Buy big box stores.