Layoffs at Coast Capital | Coast Capital Savings | Discussion forum

Briguy said
While no specific numbers have been released, a statement to Daily Hive from Coast Capital suggests the move has impacted 4% of its workforce.

According to some numbers from Indeed, Coast Capital employs between 1,000 and 5,000 people, meaning anywhere from 40 to 200 people may have been let go as part of the layoffs.

https://dailyhive.com/vancouver/coast-capital-layoffs  

Very disappointing, and likely a further bad omen for the prospects of their yet-to-formally-launch national ambitions. It likely further solidifies my thesis that Coast never wanted to grow organically nationally; they wanted to grow by amalgamation with other provincially-regulated credit unions. This adds to years of existing cost cuts; back in 2018, they had 52 branches. They're now down to 46, if I'm remembering correctly.

I definitely have no confidence in CEO MacInnis' leadership. He has no vision for its future, no implementation plan, and seems inclined to 'coast' his way to retirement in a few years by merely showing up and collecting a paycheque. His most recent position was the functional division head of TD Direct Investing in Canada, so he doesn't even really have retail banking street cred. 🙁

Cheers,
Doug

Denise said

A number to start with is 49. As some provinces employers may have to register a lay off if 50 or more full time. This may not apply as CC is under federal regulations?.  

Good point, Denise. I hadn't considered that, but indeed, with Coast's federal continuance, they are indeed a federally incorporated company and thus regulated, from a labour perspective, by the Canadian Labour Code.

If Coast Capital Savings has an employee pension plan, I wonder if their pension plan had to be continued from B.C. registration and regulation to federal registration and regulation, too...something to dig into!

Cheers,
Doug

AltaRed said
Only curious from the perspective that I am from BC and Coast Capital is big, but why does it matter if some employees are let go? Shouldn't members want to see more efficiency and better returns? Shouldn't there be a certain amount of staff turnover annually to renew and insert new ideas? 2-5% annual turnover sounds about right, and a 4% cut in headcount is close to being noise level.

Their 2021 financials look rather solid, i.e. the CU is growing per the Financial summary pages 8-11 of https://www.coastcapitalsavings.com/media/4680/ccs_2021_annual_report_web.pdf

P.S. Unless we know what positions are being cut and from where, it is conjecture. Perhaps if it is at the branch level. it makes sense as fewer branches are needed over time with more and more online banking and older folks more likely to visit branches continue to die off.  

In theory, yes. I do not believe the branch staff made up the majority, or even any, of the layoffs. If the layoffs were in support departments like Human Resources, Financial Services, or similar, I'd be less concerned. My concern, though, is the layoffs may have been concentrated in Information Technology (i.e., computer programmers) and product development and marketing.

Coast hasn't had compelling new products for years, and refuses to add things like free Interac e-Transfers and even bank-to-bank transfers in an increasing digital era, meaning their once market leading free chequing account has fallen way behind. It's fine to encourage more digital banking, but the thing is, their digital offerings are falling further and further behind because their cost cutting seems to be cutting into bone, so to speak.

They were supposed to launch a new credit card, possibly with a new credit card provider and had been considering switching to Collabria, but that's now fallen by the wayside and they've stuck with their very uncompetitive Desjardins credit card.

With First West Credit Union expected to continue federally next year, they will no longer be the only federal credit union of any size capable of swallowing up provincial credit unions. First West has been making the right investments in product and digital banking, too, whereas Coast has not. There is also a good chance Libro Credit Union and/or FirstOntario Credit Union may opt to continue federally themselves at some point, too. Innovation Credit Union's federal continuance will happen this year, next year at the latest (probably!).

They also had an online banking outage that lasted, on and off, for some 6-12 weeks last spring, too.

Cheers,
Doug

The only good memory I have about CC is their $500 promo for opening chequing account. No other financial institution have topped it yet.

RetirEd said
I was quite chuffed with the 4% 33-month promo they used to finance their federal conversion.
NewEd  

Banks and credit unions cannot use customer deposits to finance their ordinary business operations and corporate actions, such as federal continuance. I'm not quite sure where you might've gotten that idea. To finance their business operations, they can use their "cash and cash equivalents" line on their balance sheet, as well as things like their non-mortgage and -loan balance sheet assets that aren't required regulatory capital. They can also borrow, through debt borrowings. That promotion was just that, a promotion that is dilutive or which has negative consequences to Net Interest Margin to boost their deposits (whether they needed them or not). Boosting those top-line metrics can be a business and marketing strategy to make an institution appear larger and help attract new members.

Cheers,
Doug

Loonie said
Doug, I think you reported a while back that DUCA was planning to go federal. Did anything come of that?  

Oh, good memory! Yeah, I'd forgotten about that. I don't believe it ever progressed beyond DUCA senior executive team initial discussions with their board and federal and provincial regulators (i.e., it never progressed to a member vote). I checked their news releases since 2018, when that was being explored, as well as their financial statements/MDA since 2019 to present and found no mentions of "federal" or "continuance." So, I suspect it's probably safe to say they abandoned those exploratory talks / planning sessions. They did, however, acquire Continental Currency Exchange Ltd., from PACE Credit Union. If I remember correctly, PACE acquiring CCE was one of the poor business decisions of PACE's former and now disgraced management team, may have overpaid for the business then likely had to sell it at a loss to DUCA, and they didn't notify DICO/FSRA regarding the acquisition. Continental, interestingly, previously won federal approval of a Schedule I chartered bank, but then subsequently continued back as a federal corporation several years later.

Cheers,
Doug

Doug: Interesting. They must have had some benefit from it, though. The conversion and offer were simultaneous, and several staff said the unusual offer was made because of the conversion, though without specific details.
RetirEd