Canada layoffs 2025: what employers and workers must know

Recent months have seen a notable uptick in layoffs across Canada, driven by factors such as global trade pressures, sector-specific downturns, and structural shifts in business models. According to Statistics Canada, the layoff rate held at about 1.1 per cent in July, unchanged from the previous year, but the bulk of job losses occurred among younger workers (ages 15-24).  

Beyond general data, select sectors are bearing particular pressure: 

• In the energy sector, Imperial Oil Ltd. announced plans to cut roughly 20 per cent of its workforce by 2027. 

• Within telecom, Ericsson revealed job-cuts of approximately 100 technical positions in Canada.  

• Ontario’s post-secondary institutions are facing steep job losses, with a union estimate of nearly 10,000 roles at risk amid sharp enrolment declines.  

• Factors such as U.S. tariffs on Canadian goods are already affecting manufacturing, with the metals sector warning of impending layoffs.  

• Within the consumer sector, Starbucks Corporation announced a major restructuring including store closures in Canada and layoffs of approximately 900 non-retail employees. 

• Molson Coors Beverage Company revealed plans to cut around 400 salaried jobs in North America (including Canada), approximately nine per cent of its salaried workforce, as part of a cost-reduction strategy. 

These developments underscore one critical message: even when the macro economy appears stable, specific businesses can face sudden restructuring, and both employers and workers must be ready. 

Legal considerations for workforce reductions 

Employers contemplating workforce reductions or facing sudden headcount losses must be mindful of several legal obligations: 

• Notice and severance obligations: Reductions must comply with employment-standards laws, and common-law exposure may substantially exceed minimums. 

• Consistency and documentation: Inconsistent treatment of employees or vague communications may heighten the risk of litigation (for example, claims of constructive dismissal or discrimination). 

• Human-rights exposure: Where job losses disproportionately impact protected groups (by age, disability, etc.), human-rights claims are a genuine risk. 

• Contractual clarity: Employers relying on termination or layoff clauses must confirm their enforceability by ensuring no breach of employment-standards laws. 

• Legacy-contracts and union-issues: Especially in sectors undergoing tariffs or trade-impact, legacy obligations (e.g., collective agreements) must be carefully reviewed. 

By acting proactively, documenting decisions, engaging in clear communication, involving legal counsel early, employers can significantly reduce exposure to legal disruption during restructuring. 

Employment contracts, mitigation are factors in restructuring 

Employers must also be aware that employees affected by job loss or restructuring, may take their own practical and legal-strategic steps: 

• Reviewing their employment contracts carefully, especially any termination, notice or layoff clauses. 

• Assessing if they’re being offered reasonable severance or notice-in-lieu by getting legal advice before signing anything. 

• Documenting all job-search efforts and any offers of comparable employment to meet their duty to mitigate. 

• Consider the broader picture: is the termination a standard layoff or might it be construed as constructive dismissal or discriminatory termination? 

Ronald S. Minken is a senior lawyer and mediator at Minken Employment Lawyers, an employment law boutique in the Greater Toronto Area. Tanya (Tejpreet) Sambi is a lawyer at Minken Employment Lawyers.