BMO shuttering retail auto finance business, laying off employees

Bank of Montreal is closing its indirect retail auto finance business and laying off an unknown number of jobs as the bank shifts focus to other areas.

Canada’s third-largest bank announced the unexpected move on Saturday. BMO’s decision follows news that its bad debt provisions rose to $492 million, versus $136 million a year previous for the quarter ended July 31. Bad loans have been rising as a result of a sharp rise in interest rates and a slowing Canadian economy.

BMO has offered indirect retail auto financing in both Canada and the United States. Auto dealerships would arrange financing for car buyers through the bank. BMO ended this agreement with dealerships as of Sept. 15, however they will still fund all contracts given the green-light before the termination date.

“By winding down the indirect retail auto finance business, we have the ability to focus our resources on areas where we believe our competitive positioning is strongest,” BMO told Reuters via a statement.

Major layoffs continue

The latest round of job cuts at BMO follows a June instance where over 100 employees in its capital markets division were let go.

A flurry of layoffs have occurred at a number of major North American companies, including RBC, Volvo, Wells Fargo, Roku, Dell, Telus, Amazon, Microsoft, and Meta, are significantly scaling back their staffing levels as they continue to navigate challenging economic conditions.

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• Where are layoffs happening in Canada?

Severance agreements for BMO employees

In Canada, non-unionized employees at Bank of Montreal are owed full severance pay when they lose their jobs due to downsizing, corporate restructuring, or the closure of the business.

This includes individuals working full-time, part-time, or hourly in Ontario, Alberta, and B.C.

People working “on contract” or as a contractor may also be owed severance pay — given that many employees in Canada are often misclassified as independent contractors.

Severance can be as much as 24 months’ pay, depending on a number of factors.

LEARN MORE
• Rights to severance for federally regulated employees
• Severance entitlements during mass layoffs
• Severance packages in a recession

WATCH: Employment lawyer Lior Samfiru explains what rights employees have if they are being fired or let go on an episode of the Employment Law Show.

Before you accept any severance offer, have an experienced employment lawyer at Samfiru Tumarkin LLP review it and your employment contract.

We can tell you if what you have been provided is fair and how to get proper severance if it falls short of what you are actually owed.

If you don’t receive the full amount, which happens often, you have been wrongfully dismissed and are entitled to compensation.

In some cases, employers pressure staff into accepting poor severance packages, such as imposing a deadline for accepting the offer.

Non-unionized employees in Canada have up to two years from the date of their dismissal to pursue a claim for full severance pay.