Hudson’s Bay, Shoppers Drug Mart cutting jobs
Two major Canadian retailers, Hudson’s Bay Co and Shoppers Drug Mart, have announced that they will be cutting jobs in the next 12 to 18 months to reduce costs due to the “competitive and regulatory changes in the Canadian marketplace.” Hudson Bay is laying off 210 employees in the Toronto area, while Shoppers is cutting 80. To further trim costs, Hudson Bay is moving its information services’ headquarter to St. Louis.
A major reason for Hudson Bay to make such vital decision is largely due to the fact that US retail giant Target Corp. is making its step into the Canadian market. Target has bought up Zellers last year, and is slowly converting most of the previous locations into Targets stores. (Note: Zellers is used to be a division of Hudson Bay) As Zellers chain is being phased out of Canada, Hudson Bay must remodel their structure and adjust their operations in order to survive in today’s competitive market. Shoppers, similarly, had also lost an estimated $750 million last year because of the cut of generic drug prices to 25% of the price of patented drugs- down from 50%.
As Target Corp. slowly gets a hold in the Canadian retailing business, more positions will be cut, and more operations and admin jobs will be transfer down to the US for efficiency. It was not a surprise to see Hudson Bay to lay off jobs once the entire Zellers chain had been shut down. I believe that this is just the beginning for the two corporations. The cuts will definitely be larger in the future as more international competitors enter the Canadian market. It is going to be interesting to see which retailers will survive in the next 10 and 20 years.
