Canadian Tire Corp. Ltd. has announced plans to reduce its corporate workforce by approximately three percent in response to a decline in consumer demand. The retailer disclosed the job cuts in its quarterly earnings report, stating that it also intends to eliminate the majority of current vacancies, resulting in an additional three-percent reduction in its corporate headcount. With around 34,000 total employees, the job cuts will affect approximately 200 people in the corporate division, which currently has nearly 7,000 employees. The company anticipates that these measures will cost up to $25 million in the short term but result in long-term savings of $50 million.
The decision to streamline its workforce comes as Canadian Tire reported a decline in sales across most of its brands, including the flagship retail chain, SportChek, and Mark’s Work Wearhouse. Comparable store sales at Canadian Tire dropped by 0.6 percent, SportChek sales were down by 7.4 percent, and Mark’s saw a modest increase of 0.2 percent. Despite the challenging sales environment, the company announced its 14th consecutive annual dividend increase, raising the annual payout to $7 per share from $6.90.
Canadian Tire’s CEO, Greg Hicks, acknowledged the impact of softening consumer demand but expressed confidence in the resilience and strength of the business. He emphasised the company’s focus on delivering value for customers as it enters the crucial fourth quarter.