Vancity lays off 7 per cent of workforce

Vancity Credit Union ended the year with a net loss of $1.3 million after tax, according to its 2023 annual report. (Vancity - image credit)

Vancity says it is laying off seven per cent of its staff after a year of losses and rising costs.

The decision affects nearly 200 workers at Canada's largest community credit union, according to a Thursday news release from the credit union's CEO, Wellington Holbrook.

Holbrook said Vancity needs to restructure to meet current market conditions and invest in its growth.

According to its 2023 annual report, Vancity ended the year with a net loss of $1.3 million after tax. Without profit, Holbrook said the credit union wasn't able to share dividends with members despite previous "record" allocations.

The CEO attributed the challenge to rising costs and the "unprecedented" rise in interest rates over the past few years. In particular, he said Vancity holds many loans issued at record low interest rates while higher interest rates have lowered demand for new loans.

"Our results are also not surprising given the economy around us," he said in the annual report.

Holbrook noted in the report that the credit union set aside "ample reserves" to cover contingencies, even if it restricted last year's profitability.

In a Friday interview with BC Today, Holbrook said he doesn't deny that the financial reality was part of the credit union's decision-making but that restructuring is about meeting broader changes within the financial industry, such as the drop in in-branch transactions.

Also on Friday, the B.C. General Employees' Union — representing over 800 of the credit union's workers — said the decision affects around 30 to 35 members. The union also said the layoffs came "completely without consultation," and it was only formally notified Thursday.

"Vancity has been operating more like a bank than a credit union, and this is part of a continuing pattern of abandoning their social values," BCGEU President Paul Finch said in a statement to CBC News.

Holbrook pushed back against the criticisim in his Friday interview, saying that the credit union has been having open conversations "for some time" with all of its employees about the need to change.

"I don't think that would have been that big of a surprise," he said. "It's certainly not what I'm hearing."

He also pointed to the support outlined in the Thursday news release, which includes offering laid-off employees "a comprehensive, fair and equitable package of compensation, health and well-being, and career supports." The statement also says Vancity will follow the collective agreements regarding next steps for unionized workers.