Mining & Metals
Update: Market Chatter: Rogers Communications Offering Buyouts to Half Its 25,000 Workforce, Globe and Mail reports
(Adds commentary from Adam Shine at National Bank of Canada)Canadian telecom operator Rogers Communications (RCI-B.TO) is offering voluntary departure packages to half of its 25,000 employees, the Globe and Mail is reporting on Monday.It's the telecom sector's largest round of buyouts in recent years amid slowing growth, the paper said.Here are some details cited in a Reuters report, as published on the website of BNN Bloomberg:- Rogers on Monday said employees across numerous business divisions will be offered packages, but did not say whether it had a reduction target, according to the report.- "We are taking steps to adjust our cost structure to reflect the business realities of the current environment. As part of this, some teams have chosen to offer voluntary departure and retirement programs to give some employees the choice to decide whether they'd like to stay with the company or begin a new chapter," Rogers spokesperson Zac Carreiro told the Globe and Mail.- Some teams across the company including on-air talent, Sportsnet employees at Rogers Sports and Media and union employees are not eligible, the report said.- Rogers did not immediately respond to a Reuters request for comment.- Earlier this month, Rogers forecast 2026 capital expenditure about 30% below 2025 levels, as it reins in spending amid a tough pricing environment.National Bank of Canada analyst Adam Shine noted it was reported by The Globe and Mail that Rogers "is offering voluntary departure packages to 50% of its employees, excluding Maple Leaf Sports & Entertainment". MLSE represents around 3,000 of the total headcount of approximately 25,000 at Rogers. The immediate extrapolation from the headline is that this could involve up to 11,000 employees, Shine said, before adding: "Unlikely."Shine noted Shaw Communications back in 2018 offered buyouts to roughly 6,500 of its approximately 14,000 employees. It thought about 10% would take up the offer, but closer to 3,300 did. This represented around 51% of those eligible and just over 23.5% of the cableco's total employees.Rogers, Shine also noted, has done voluntary programs in the past, with the scale/uptake of these always well below what's otherwise being implied by and extrapolated from the article.Shine said: "The current program from the company is restricted and it will determine the number of employees who will ultimately get their voluntary buyouts. The Shaw program didn't necessarily follow the same approach.""As we await a return to sustained discipline in wireless in Canada post-1Q26, Rogers has a releveraging dynamic to address as it prepares to acquire the other 25% of MLSE in 2H26 before working through a deleveraging phase through the monetization of its sports/media assets. Its profile for organic annual deleveraging didn't look great ahead of 1Q reporting and appeared to offer little wiggle room for the timing and size of anticipated sports/media monetization expected in 1H27. The material capex reduction announced with 1Q doubled the annual organic deleveraging capability and an acceleration of employee attrition will also help to right-size costs amid competitive dynamics, aggressive promotions and punitive regulations which management called out as the reasons for adjusting its capex outlook," Shine wrote."We note that Rogers committed with its purchase of Shaw to create 3,000 jobs in Western Canada within five years and to maintain at least the extra 3,000 by the acquisition's 10th anniversary. In its second annual compliance report related to the Western Commitment, which included a Western Canada headquarters in Calgary, the company noted that it was on track and had added 1,828 employees."National Bank has an Outperform rating and C$62.00 price target on Rogers.(Market Chatter news is derived from conversations with market professionals globally, and/or from other media sources. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)
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