London Inc. Weekly: A summary of regional business news from the past week

Don’t miss your roundup of this week’s business news

Written by Kieran Delamont, Associate Editor, London Inc.

Canada Life axes 200 jobs, 35 in London, as it outsources tech to India

Winnipeg-headquartered Canada Life is cutting 200 jobs across the country as it moves to outsource its IT department, company officials said this week. Thirty-five employees in London will be let go by early July, while the tech department will be taken over by India-based IT provider HCLTech. “This partnership will provide Canada Life with access to the latest technology, skills and knowledge that will enable the company to better meet the growing expectations of our advisors and customers,” a statement from the company said, adding that they believe the move will “help us deliver internal IT services to our employees more effectively and efficiently.”

The upshot: The layoffs are not likely to do much for Canada Life’s public image, which had been tarnished by a botched takeover of the federal employee benefits contract (worth a tidy $514 million) last year that was marked by slow wait times and claims refusals. London-based tech analyst and journalist Carmi Levy told the London Free Press that the move was a “cost-cutting move, nothing more” and wondered how cutting their IT department was intended to improve its services. A report from the Winnipeg Free Press suggested that HCLTech was planning on establishing an office in Winnipeg (where Canada Life is headquartered), and that some of the affected employees will be offered similar positions at that company.

London’s first cashier-less grocery store opens at West 5

London’s first cashier-less grocery store has opened its doors in the Hēlio building at West 5. The unmanned grocery store brand, called Aisle 24, was founded in 2016 by the son of two convenience store owners, John Douang, who had a background in IT, and has since franchised, with 29 stores across Canada. The franchise is owned by Western grad Ganesh Tadikonda, and is one of two planned Aisle 24 locations in London, with the other ― set to open in the Luxe residential development near the university ― still in the works. The store brand has set its sights on further expansion across Canada this year, focusing largely on residential condo and apartment developments.

The upshot: The autonomous grocery store concept has been flirting around the edges of the grocery market in the last few years, with Aisle 24 probably being the most well-known company offering the cashier-less experience in Canada. Right now, the company’s sweet spot seems to be stores located near new buildings, but the company’s founder recently expressed interest in experimenting with other store concepts less wedded to urban housing developments and branching out into the ‘burbs. The whole sector did get a major shakeup last week, though, when Amazon scrapped its Just Walk Out grocery store technology, featured in about half of its Amazon Fresh cashier-less supermarkets in the U.S. As first reported in The Information, the supposedly AI-powered technology was in fact reliant on “roughly 1,000 workers in India who review what you pick up, set down and walk out of its stores with.”

Read more: CTV News London | Retail Insider

Despite EV market lull, VW sticking to 2027 PowerCo opening

The EV market may be cooling, but VW says it is sticking to its 2027 opening date for its PowerCo SE battery gigafactory in St. Thomas. “Our plans for the 2027 completion have not changed,” a company spokesperson told the London Free Press, though he said that “an exact start date for hard construction has yet to be determined and will become clearer as we work through the pre-construction phase.” Last week, VW began posting job ads for some of its top management positions for the plant, with spokesperson Thomas Tetzlaff saying that they intend to hire about 100 people by the end of this year, mainly in executive roles meant to support the startup of the plant.

The upshot: The commitment from VW will at least partially reassure those who are looking at the EV market with mounting concern. Last week Ford pushed back the start of EV production in Oakville by two years, from 2025 to 2027, while General Motors and Tesla have both seen slowdowns in sales. The share of the market made up of electric vehicles is still improving in Canada ― nearly 11 per cent of all new vehicle registrations in 2023 were zero-emission vehicles ― but growth is slowing. “While the total market in Canada has slowed down, it’s EVs that have slowed down by more than double,” says Robert Karwel of J.D. Power. Early adopters and well-heeled consumers seem to have accounted for the bulk of EV buyers over the past couple of years, but attracting general buyers at a mass level is proving problematic for several reasons, including high prices and poor charging infrastructure. Add to this the high-interest rate environment and the current housing market, and it’s a “tall order to ask the average Canadian” to buy an EV, Karwel said.

Read more: London Free Press | Yahoo Finance

Fanshawe to see little change in international enrollment in 2024; uncertainty looms beyond that

Fanshawe’s president Peter Devlin told faculty and staff that the college’s international student enrollment won’t change much in 2024 but said that the outlook for next year remains unclear. “I’m pleased that we will have a similar number of international students than we had in 2023,” Devlin told faculty in a town hall meeting. Around 55 per cent of Fanshawe’s student base is made up of international students. There had been a lot of concern about the federal government’s announcement of a cap on international enrollment, both among university administration who were concerned about revenues and among faculty concerned about potential job cuts. Devlin’s comments suggest that, at least for the time being, things should remain relatively stable (though he did note that the college will see “slightly reduced” revenues and some staffing changes this year). All that said, Devlin said that there’s still uncertainty over next year and beyond. The college doesn’t know what allocation of international permits it will receive from the province next year, and that creates long-term uncertainty for the institution. “We are reliant on international students,” he said, “and with that reliance comes some level of uncertainty.”

The upshot: Fanshawe may have been spared the worst outcomes this year, though the situation facing public colleges in Ontario remains precarious, to say the least. The school is set to receive around $4 or $5 million from the province’s $1.2-billion aid package for post-secondary institutions, but that’s unlikely to be enough to plug the structural gaps in funding, nor relieve them of the need to rely on international student tuition. “I think it’s important for all of us to realize that Ontario remains the poorest-funded post-secondary sector in Canada,” Devlin told school staff. Ontario’s post-secondary sector has been calling for more money, and an expert panel recently recommended that the provincial government boost funding by 10 per cent, and allow them to increase tuition by five per cent; in response, the province announced funding increases of about half that amount. Elsewhere, universities are hoping to see as much as $6 billion in new research funding in next week’s federal budget.

Read more: CBC News London | Globe and Mail