The number of layoffs doubled between January and June in Quebec compared to last year, a signal that companies are tightening their belts in an inflationary environment and rising interest rates. While the labor market remains stable overall, a backstory seems to be taking hold.
No less than 7,380 people have lost their livelihood or learned that they will soon lose it, La Presse found by compiling data on layoff notices published monthly by the Ministry of Employment and Social Solidarity. This is twice as many as the 3,700 layoffs recorded during the same period in 2022.
“There are clearly things happening,” said Desjardins Group chief economist Jimmy Jean. It is clear that the environment is difficult for exposed companies, for example in sectors sensitive to interest rates. It is not the same reality everywhere. »
On four occasions since the start of the year, bad news has been announced to at least 1,000 employees in the same month. This had not happened in 2022. A peak (2045 people) was even recorded last April, following the announcement of the closure of the Olymel meat processing plant in Vallée-Jonction in Beauce , which will close by the end of the year. Some 1,000 jobs will be lost.
The chief economist at Desjardins nevertheless recognizes that the findings of La Presse turn on some yellow economic lights.
Hiring intentions are weakening among companies according to the most recent Bank of Canada survey while their finances are weakening. The proof: last May, the number of insolvency files of Quebec companies showed an increase of 33% over one year.
“That could be a factor behind an increase in layoffs,” Jean says.
Despite the climate of uncertainty, the labor market is showing resilience. Last May, the unemployment rate remained unchanged at 4%. In the first half of the year, only 5,000 jobs were lost in the province when counting full-time and part-time positions. In addition, according to the most recent data from the Institut de la statistique du Québec (ISQ), there are some 196,500 vacant positions – a high number despite a 12% decline compared to last year. We will have the most recent portrait of the labor market this Friday, since Statistics Canada will publish data from the Labor Force Survey for the month of June.
The cuts that have occurred across the province are not yet significant enough to be reflected in unemployment data, said National Bank economist Alexandra Ducharme.
“We see that people are laid off, but probably they find work elsewhere, she analyzes. It’s a job market that’s still tight, but these are data [the layoffs] that show a trend. They are interesting. We’re going to start looking at them. »
On the ground, the mood seems to be changing among a growing number of employers. President and human resources strategist at Équipe Drouin RH, Marie-Ève Drouin is well placed to see this. Small and medium-sized enterprises (SMEs) with fewer than 60 employees make up the bulk of its customer base. Inflation and the economy have dethroned the labor shortage for many entrepreneurs, says the manager.
Since the beginning of the year, Ms. Drouin says she has been supporting clients who have to make staff reductions, which has been rather rare in recent years.
“At the beginning of the year, people were very cautious because they saw a slowdown, but said to themselves, ‘I don’t want to be the first to lay off employees,'” she explains. With rising interest rates [raising borrowing costs], I have businesses saying, ‘At this point I have no choice. “”
At Altrum, a firm specializing in human resources, director Julie Lajoie did not find herself in this situation. However, it has observed changes since the beginning of the year. The job market is still “tight,” but the pool of candidates finally seems to be growing when it comes time to recruit, says Lajoie.
“We had access to a few more applications, underlines the director of Altrum. It is also a greater number of quality applications, which correspond to the requirements of the position. I can say that we have seen an improvement in the last six months. »
Ms. Lajoie agrees with the National Bank economist. For the moment, people who lose their jobs do not seem to stay unemployed for long. It remains to be seen how the second half of 2023 will unfold. No one has a crystal ball to find out, recalls Ms. Lajoie.