For several months, the job market has offered some clarity amid a dark economic outlook. The president and CEO of Desjardins Group, Guy Cormier, fears that the tide is turning and that unemployment will once again become a concern.
“Yes, that worries me more,” he replied in an interview on Thursday, on the sidelines of a speech to the Canadian Club of Montreal. Currently, it is not the next interest rate increases that concern me. Could there be any? Maybe, but I think the biggest increase is behind us.
“I look a lot at the evolution of the unemployment rate to see if employment remains stable or if we see an increase in unemployment,” he adds.
The big boss of the financial cooperative has repeatedly presented the strength of the job market, in a context of labor scarcity, as a protective factor which would mitigate the negative consequences of an economic slowdown.
If the job market were to deteriorate, the situation of many households could become untenable in a context of rising interest rates. “If we see mortgage renewals coming with significant increases in rates and monthly payments and if there is also a loss of jobs in the household, that concerns me. »
Despite the layoffs that have been making headlines recently, Mr. Cormier believes that the job market is not yet weakened. “When I look at the entire Canadian economy, we are not there. “There is no one who has announced tens of thousands of layoffs, as we can see in some countries around the world.”
In October, the unemployment rate increased by 0.2 percentage points to 5.7% in the country, according to Statistics Canada data. In Quebec, it increased by 0.5 percentage points to reach 4.9%.
The entrepreneurs met by Mr. Cormier seem reluctant to let employees go while the scarcity of labor continues in several sectors of the economy.
“We (the entrepreneurs) will really be careful before making layoffs, because it’s talent that we have developed and we know that we will perhaps need it in two or three years.”
Layoffs at Desjardins
As an employer, Desjardins Group recently decided to lay off employees due, in particular, to the economic slowdown.
In October, the cooperative laid off nearly 400 employees in Montreal and at the Lévis head office. In June, the Desjardins Movement laid off 176 people in Montreal. Other Canadian financial institutions have also made layoffs in recent months.
In an interview, Mr. Cormier explains that the prospect of an economic slowdown is one of the reasons that motivated this decision. “An economic slowdown may have an impact on our costs, our provisions and loan losses. So, we definitely look at the whole operation. You have to be really vigilant. We must rigorously manage our costs.”
Technological changes and changes in consumer habits also lead the cooperative to rethink its ways of doing things. “There are a lot of professions that are changing. I think it’s normal for the industry to ask itself: are there adjustments that we need to make?”
With attrition, however, Desjardins has a certain “flexibility” to avoid job losses. Between 3,000 to 4,000 of its 55,000 employees leave the company each year to retire or take on new challenges.
The cooperative continues to recruit in certain sectors, adds Mr. Cormier. “In security, in artificial intelligence, in technology, our call centers, I am thinking of the growth in our insurance companies, there are places currently where we are stable or increasing. Then, there are other places where we simply readjust.”