BURST
The depth of Metro Vancouver’s decline in residential construction became more visible this week with news that one of its biggest developers is making substantial job cuts in the face of what its CEO has called “a cost of delivery crisis.”
Wesgroup Properties LP, in a statement, said it is laying off 12 per cent of its workforce, which CEO Beau Jarvis indicated includes development, construction, asset management, marketing, finance, interior design and leasing.
No specific numbers were included in either Jarvis’ announcement via LinkedIn or company statement, but Wesgroup’s LinkedIn profile indicates the firm employs between 201 and 500 people.
This is the second time in six weeks a major player in Metro Vancouver development has announced layoffs. The Rennie Group, in early May, said it had laid off 31 employees — a quarter of its head office staff — citing economic factors, geopolitics and artificial intelligence.
Jarvis, in a LinkedIn post, called the layoffs “an absolute last resort” to deal with the prolonged economic uncertainty and rising costs that the industry faces.
“We exhausted every possible avenue to avoid this outcome, including creating efficiencies in our systems and processes, engaging in aggressive cost-reduction measures,” Jarvis wrote.
“(We) even sold off significant assets to generate capital/liquidity to cover overhead costs,” Jarvis said. “This was all in hopes of preserving as many jobs as possible. But despite these efforts, the economic realities left us no choice.”
Jarvis noted that projects across the country are being cancelled or put off and that “we are delivering housing at a cost that people cannot afford to purchase. I will say it again – THIS IS A COST-OF-DELIVERY CRISIS (sic).”
Wesgroup, whose portfolio includes the 52-hectare master-planned River District neighbourhood in south Vancouver, said in a statement that it remains in a fiscally sound position, but acknowledged that the company has had to delay several upcoming projects “because the economics no longer support moving forward.”
“We’ve worked hard to avoid workforce reductions, but like many of our peers, we’ve reached a point where we must realign our operations for long-term sustainability,” the statement read.
More to come …