Updated February 9th, 2024 at 11:00 IST
Bell Canada lays off 4,800 employees to cut cost challenges
This move, marking Bell's most extensive restructuring in approximately thirty years, entails a reduction of about 9% of its workforce.
Bell Canada layoffs: Bell Canada announced on Thursday a major workforce reduction, slashing 4,800 jobs in response to cost challenges attributed to declining legacy phone and news sectors, as well as what the media and telecom company perceives as ‘unsupportive’ government and regulatory decisions.
This move, marking Bell's most extensive restructuring in approximately thirty years, entails a reduction of about 9 per cent of its workforce. This decision follows a previous announcement last year, where the company revealed plans to cut 1,300 jobs due to diminishing revenue from legacy operations.
Bell's CEO, Mirko Bibic, underlined the necessity of further action in light of what he described as increasingly adverse federal government and regulatory stances. Bibic criticised the federal government for its perceived failure to address the competitive imbalance with global tech giants. He particularly cited concerns over the Canadian Radio-television and Telecommunications Commission's (CRTC) mandate for Bell to allow competitors to use its infrastructure for internet services, a move Bell claims will impact its competitiveness.
The CRTC justified its decision by highlighting declining competition among high-speed internet service providers. In response, Bell announced a reduction of capital spending by C$1 billion.
Reacting to the layoffs, Canada's Heritage Minister, Pascale St-Onge, expressed disappointment, describing it as a ‘dark day’ for those affected. St-Onge noted changes made at the CRTC to support struggling companies but stressed the need for corporate responsibility, pointing out that despite challenges, Bell remains profitable.
Operating revenue for the Montreal-based company saw a slight increase of 0.5 per cent to C$6.47 billion in the fourth quarter. Bibic attributed declines in advertising revenue and news operations losses to the challenging environment. The announced job cuts are anticipated to result in savings ranging between C$150-$200 million for the company this year.
Meanwhile, British Columbia Premier David Eby criticised Bell and similar entities as "corporate vampires," urging federal intervention. Eby accused these companies of contributing to the decline of local news quality by laying off journalists.
In related developments, Canada recently enacted legislation compelling tech companies to compensate Canadian publishers for news content. Following this, Google agreed to pay C$100 million annually to news publishers in the country. Conversely, Facebook opted to block news-sharing on its platforms in Canada in response to the legislation.
(With Reuters inputs)
Published February 9th, 2024 at 11:00 IST