Trudeau calls out Canada's largest communications company following announced cuts

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Canada’s largest communications company has announced a reduction of 4,800 positions, representing nine percent of the company’s workforce. The prime minister has labeled it a “garbage decision.”

BCE, which provides Bell broadband wireless, internet, TV, media, and business communications services, has announced layoffs and a range of cost-cutting measures, including the intention to roll back their fiber network expansions.

In the company’s recently released summary of 2023 results, BCE blamed their decision to slash capital expenditures on fiber expansion as being “a result of federal government policies.”

The company also cited a decision made by the Canadian Radio, Television, and Telecommunications Commission (CRTC) regarding a wholesale access rate as responsible for their announced changes and said CRTC’s wholesale access rate decision “discourages network investment.”

BCE’s announcement reported that 750 contractors will be laid off in the restructuring, which the company said is the largest restructuring they’ve undergone in 30 years.

In the same announcement, the CEO and president of BCE and Bell Canada, Mirko Bibic, described BCE’s 2023 and Q4 results as “solid.”

“The Bell team has demonstrated strong executional discipline and cost containment this quarter, enabling Bell to deliver solid results in Q4 and throughout 2023,”he was quoted as having said.

Prime Minister Justin Trudeau reacted to the news, announcing to reporters that he was “furious” with BCE’s announced layoffs.

“This is a garbage decision by a corporation that should know better,” Trudeau said during an Ontario press conference.

In an open letter penned by Bibic, dated Feb. 8, the CEO elaborated on the logic behind his company’s decision to restructure their workforce.

“We continue to face a difficult economy and government and regulatory decisions that undermine investment in our networks, fail to support our media business in a time of crisis, and fail to level the playing field with global tech giants,” Bibic wrote. “Of particular concern is a recent decision by the CRTC forcing Bell to provide third-party resellers access to our high-speed fiber network before we have even had an opportunity to recoup our multi-billion dollar investment.”

Bibic stated that Bell Canada expects to lose $250 million annually in legacy phone revenues and wrote that “advertising revenues declined by $140 million in 2023 compared to 2022.”

“Across Bell Media’s news operations, we continue to incur over $40 million in annual operating losses despite having the most-watched network of local TV stations,” Bibic wrote.

As part of the changes, BCE announced it would divest 45 of their 103 radio stations.

“Once these transactions close, it’s our intention that the divested stations will remain part of iHeartRadio Canada, helping to transform Bell Media’s radio operation to an innovative audio business,” the company’s announcement stated.

The company detailed plans previously announced in November to reduce capital expenditures by “a minimum of $500 million in 2024” and said the layoffs represented a “cost savings of $150 million to $200 million.”

According to a published CBC report, BCE’s cuts will have large impacts on television newscasts and news stations.

“While our transformation allows us to be faster and more agile, it also requires us to move away from highly regulated parts of the business to new growth areas,” Bibic wrote of the company’s announced changes in his open letter.

Meanwhile, the company also announced it would be increasing BCE’s common share dividend by 3.1 percent for 2024, representing a $0.12 per share increase and bringing BCE’s annual common share dividend to $3.99.

In lambasting BCE’s announced changes, Trudeau pointed to a cycle where he said corporate entities purchase journalistic organizations, lay off journalists, and diminish the quality of available news content.

“And then when people don’t watch as much, or engage as much, the corporate entity says, ‘oh, see, they’re not profitable anymore. We’re going to sell them off,” Trudeau said. “This is the erosion, not just of journalism, of quality local journalism, at a time where people need it more than ever given misinformation and disinformation, but it’s eroding our very democracy.”