Tim Hortons job cuts limited to allow merger

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It turns out Ottawa has imposed a limit on the number of jobs that can be cut at Tim Hortons’ offices in the wake of the Burger King takeover.

While it was known the takeover agreement required staffing levels to stay the same at restaurants, Industry Canada now says the new Restaurant Brands International is also required to maintain 80 per cent of its office staff in Oakville and across Canada.

Today on Morning Live Steve Howse of the DeGroote School of Business explained the company agreed to the job cut limits to get approval for the deal.

“Government approval for the acquisition of a Canadian company you have to fill out the form and you have to say what you’re restructuring because there are savings in restructuring companies. . And so they signed off on 20 per cent, so they’re just probably one body under that.”

“There is 400 positions and they have to be associated with this act. If somebody is eliminated for non-performance, that doesn’t count. If somebody is eliminated because their job disappeared for other reasons, that doesn’t count.”

“There’s always math, but I’ve restructured a lot of publicly traded companies; you never get this wrong because the lawsuits are way too painful.”

Howse say the new owner of Tim Hortons has a track record for making companies efficient and profitable. Tim Hortons has refused to say how many people it let go this week, but the new information suggests around 400 positions were eliminated.