Tim Hortons says about 350 employees lost their jobs this week in layoffs across its organization, focused mainly at its headquarters and regional offices.
A spokeswoman for the company told The Canadian Press that all affected employees have been notified and the layoffs remain within commitments made to Industry Canada to maintain certain job levels.
The company has a total of 2,300 employees at its headquarters, regional offices and distribution centres across the country.
Tim Hortons merged with Burger King under Restaurant Brands International late last year, and the company’s new owner was widely expected to cut staff.
Part of Ottawa’s stipulations on the merger required the company to maintain staff levels at its franchised restaurants for five years.
Employees at its offices were not protected under that agreement, though the company plans to maintain its headquarters in Oakville, Ont.
Earlier this week an Industry Canada spokesman confirmed Ottawa has restricted Burger King from axing more than 20 per cent of corporate staff at Tim Hortons’ longtime headquarters or regional offices.
The newly merged company Restaurant Brands International is required to “maintain significant employment levels” of non-restaurant employees as part of the list of commitments the fast food behemoth made to get final approval in December from the federal government to seal the $12.5 billion deal.
Although it wasn’t announced at the time, Industry Minister James Moore actually secured a more definitive commitment that Burger King maintain 80 per cent of Tim Hortons’ “entire corporate footprint” at both the Oakville head office and regional offices across Canada, said his press secretary Jake Enwright.
Media speculation had run rampant that up to 40 per cent of middle managers were swept up in the round of layoffs that began Tuesday morning, just six weeks after the controversial takeover was completed.
With an estimated 2,000 employees at both head office and seven regional offices from British Columbia to Nova Scotia and one in the U.S., the restrictions would have translated into a maximum of 400 workers potentially impacted.
“This is a private business decision and our thoughts are with those who received this difficult news,” said Enwright.
He pointed out that Tim Hortons franchises, which employ 96,000 restaurant workers, cannot reduce staffing levels under the agreement with Burger King. The beloved 50-year-old doughnut and coffee giant is Canada’s largest restaurant chain.
Industry Canada has the right to take legal action should Burger King break any of its commitments made in the takeover, and has done so in the past in other merger deals.
Restaurant Brands International shares, which replaced Tim Hortons on the Toronto Stock Exchange after the merger December 15, fell 68 cents, or 1.4 per cent, Wednesday to close at $48.
The merger created the world’s third-largest restaurant company, with 18,000 stores and $23 billion in sales. It was originally pitched by executives as the best way to expand Tim Hortons internationally and make the beloved Canadian brand truly global.
When the blockbuster deal was announced last August, critics warned that Burger King’s owner 3G Capital, a Brazil-based investment firm, has a track record of paring staff and slashing costs, and would do the same in a Tims takeover.
“This round of layoffs should serve as a warning to Tim Hortons’ franchisees who depend on support from the company to grow their businesses, taxpayers who expect corporations to pay their fair share, and consumers who expect Tim Hortons to be a community leader in Canada,” said a group of union leaders from Unifor, Teamsters and SEIU Healthcare in a statement Wednesday.
The doughnut chain is not unionized.
- With files from The Canadian Press