WestJet Airlines Ltd. said Wednesday it will permanently lay off 3,333 employees as part of a major restructuring amid the coronavirus pandemic that has devastated the travel industry.
Company spokesperson Morgan Bell tells Global News a total of 116 Manitoba employees are being permanently laid off, including 104 in Winnipeg and 12 in Brandon.
A drastic drop in air travel is being blamed for the company’s decision, Bell added.
WestJet, which went private after Toronto-based Onex Corp. bought the company in December, had employed some 14,000 workers just before the pandemic struck.
About 4,500 active employees will remain on the payroll after the layoffs.
The company plans to consolidate call centre activity in Alberta, restructure its office and management staff and contract out operations at all but four of the 38 Canadian airports where it operates, WestJet said in a release Wednesday.
“Throughout the course of the biggest crisis in the history of aviation, WestJet has made many difficult, but essential, decisions to future-proof our business,” said CEO Ed Sims, calling the changes “unavoidable.”
About 2,300 airport customer service agents and baggage handlers will lose their jobs, according to CUPE union official Chris Rauenbusch.
Some 600 office and management staff in Calgary will be cut within a month or so, he said.
Another 433 call centre representatives will be laid off in Moncton, Halifax and Vancouver, he said.
A ‘weak demand environment’
The company said preferential hiring interviews for some of the 2,300 WestJet airport workers now facing layoffs will be a priority in selecting airport partners.
The pandemic saw the airline suspend most of its schedule — including all international trips — in late March, running at less than 10 per cent capacity.
Canadian airline revenue streams have shrunk to a fraction of 2019 levels, with fleets parked and border shutdowns ongoing even as domestic travel demand gradually starts to pick up.
Canada, unlike countries including France, Germany and the United States, has held off on sector-specific support for carriers. Instead, Prime Minister Justin Trudeau has rolled out financial aid available across industries, including the federal wage subsidy and loans starting at $60 million for large companies.
In a memo to staff Wednesday afternoon, Sims said the dearth of government funds along with a “patchwork” of provincial and federal travel advisories and constraints on non-essential domestic and international travel are compounding a “weak demand environment.”
Last week fewer than 7,500 passengers arrived at Canadian airports from the U.S., down more than 98 per cent from a year earlier, according to the Canada Border Services Agency.
International passenger numbers were down 95 per cent compared to a year earlier, the agency said Wednesday.
Manitoba and the Maritime provinces continue to restrict interprovincial travel, though the four Atlantic provinces announced plans Wednesday to create a “bubble” that allows residents to travel within the region, removing a 14-day isolation period.
Travellers arriving in Canada from abroad must self-isolate for two weeks, and last week, Trudeau extended a ban on non-essential travel between Canada and the U.S. until at least July 21.
WestJet earlier this week said it had halted its pursuit of a labour code exemption that would have facilitated permanent mass layoffs.
WestJet will have to provide unionized employees affected by the latest round of layoffs with payment in lieu of notice, Rauenbusch said.
–With files from Clay Young and The Canadian Press