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Job cuts likely in Rogers’ $26-billion deal to acquire Shaw, critics say,

Expert says Rogers likely talking layoffs with regulator

CHRISTINE DOBBY

Executives from Rogers Communications Inc. are promising growth and investment in the West, but critics say the company’s $26billion deal to acquire Shaw Communications Inc. will also come with job cuts that Rogers is privately counting on but not talking about publicly.

At a Canadian Radio-television and Telecommunications Commission hearing this week, Rogers reiterated its promise to spend $2.5 billion on 5G technology and $1 billion on rural internet in British Columbia, Alberta, Manitoba and Saskatchewan.

It also plans to “create up to 3,000 net new jobs” in those four provinces, plus build an engineering centre and maintain a western head office, all key to winning support for the deal in Shaw’s home town of Calgary.

The merger of Canada’s second and fourth-largest telecom companies will affect millions of consumers and also bring together two major employers: Shaw has 9,400 workers while Rogers has 24,000 employees, more than half in the GTA, which is home to its downtown Toronto headquarters.

But academics, public interest groups, a major telecom rival and one of Canada’s biggest unions say while Rogers is touting its investing plans to the broadcast regulator on the public stage, it is not talking about the inevitable job cuts that will come with the merger of two massive cable and wireless businesses with overlapping departments of almost everything.

Behind closed doors, Rogers is almost certainly telling the Competition Bureau how much money the combined company will save, including through the elimination of

jobs, said Robin Shaban, public policy researcher and co-founder of economic consulting firm Vivic Research.

In a twist of Canadian competition law, the deal could hurt competition and be bad for wireless, home internet or TV customers, but still get the green light from the bureau if the companies can show it leads to significant savings. That’s bad news for workers, Shaban said.

“We have a law that allows mergers that hurts competitors if the merger leads to sufficient job losses,” she said, referencing what’s known as the “efficiencies defence.”

Shaban said companies often cite job cuts as one of the top cost savings — or “synergies,” as Rogers calls the $1 billion it expects to save yearly within two years of closing.

“You can’t have $1 billion in annual cost savings and not have any job cuts,” she said.

“I don’t think there’s any doubt that when you get a merger like this, companies look for efficiencies and that’s always a code word for losing jobs,” said Gregory Taylor, professor of communication studies at the University of Calgary.

The CRTC is focused on the transfer of broadcast licences while the bureau and the federal department of innovation are conducting parallel reviews on competition and the ownership of wireless airwave licences. Neither is expected to hold public hearings.

Asked if the bureau is considering how the deal will affect labour, spokesperson Jayme Albert said the objective is to look at whether or not it will substantially decrease or prevent competition. “While we understand that mergers can have an impact on employees, in determining whether a transaction will result in a substantial lessening or prevention of competition, we generally do not take into account any impact a transaction may have on jobs or employment.”

Unifor, which represents 26,000 telecom workers and 500 in the broadcast and film sectors (as well as unionized workers at the Star), told the CRTC Thursday it is concerned about broadcast job losses after Rogers told the regulator it will end about $13 million in annual local news funding that Shaw provides to Global News and redirect it to its own broadcaster, Citytv.

Unifor said that could lead to more than 160 job losses based on rough math of $80,000 per job. (Global owner Corus Entertainment has indicated it will turn to other sources of funding.)

The Public Interest Advocacy Centre and the Forum for Research and Policy in Communications also told the CRTC they expect broadcast job losses with any new hiring on the telecommunications side. PIAC said those could be temporary network installation jobs.

Rogers spokesperson Andrew Garas said Thursday that about 60 per cent of the 3,000 western positions will be in Alberta and most of the rest will be in B.C., noting the “jobs will span a range of permanent roles.”

He said investments in infrastructure mean “you need teams to build it, maintain it, and serve the customers using it.”

“As we work our way through the integration process … we’ll continue to have strong employee base in all of the markets we operate in across Canada,” he said. “Together with Shaw, we will (be) a truly national company with local teams that can continue to serve local customers and businesses in communities where we live and work.”

Garas did not say whether or not job cuts would be part of the $1 billion in synergies, which he said would come from lower network costs and eliminating “duplicative technology associated with greater scale.” The company also expects higher revenue as customers use its faster networks more.

Telus Corp warned the CRTC on Tuesday the transaction would contribute to a “hollowing out of Western Canada’s business community,” saying the large amount of debt Rogers is taking on to pay for the deal “will inevitably lead to job losses in Western Canada.”

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You can’t have $1 billion in annual cost savings and not have any job cuts.

ROBIN SHABAN, CO-FOUNDER OF VIVIC RESEARCH

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2021-11-26T08:00:00.0000000Z

2021-11-26T08:00:00.0000000Z

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