Employment Law

Hudson’s Bay Bankruptcy and Layoffs: Severance Pay and Employee Rights Explained

May 27, 2025

A photo of clothing on a rack in a store. (Phone: Hannah Morgan / Unsplash)

End of an era

Hudson’s Bay Company (HBC)—Canada’s oldest retailer—is set to close its stores on June 1, affecting more than 8,300 workers.

The update comes after the company announced that it’s selling its intellectual property to Canadian Tire for approximately $30 million.

➡️ Read about the store closures here.

Do Hudson’s Bay employees get severance pay during bankruptcy and liquidation?

In a typical layoff, non-unionized employees are entitled to severance pay, which can be up to 24 months’ pay, depending on factors like age, position, and length of service.

But Hudson’s Bay’s CCAA filing and expected liquidation mean this isn’t a typical layoff.

LEARN MORE: Bankruptcy in Canada: Guide for Employees

Employees will likely not receive their full severance, and many won’t receive anything beyond what’s available through government programs.

ℹ️ Employees become unsecured creditors: Secured creditors (banks and landlords) are first in line for any money recovered from the sale of company assets.

Unsecured creditors, including employees, are typically last in line to receive compensation.
In most cases, there’s little or nothing left to pay employees their severance.

I was paid to work inside a Hudson’s Bay by another company, do I get severance?

Yes, you likely do.

If you were paid by a company (i.e. Estée Lauder, MAC Cosmetics, etc.) to work inside a Hudson’s Bay store, there’s a very good chance that the department store chain isn’t your actual employer—meaning you could be entitled to full severance pay.

Your pay stubs, T4, and employment contract will help you determine which company you work for.

Multiple Estée Lauder employees have reported layoffs as a result of Hudson’s Bay’s situation.

✅ Hudson’s Bay isn’t your employer? Talk to an experienced employment lawyer at Samfiru Tumarkin LLP. We can review your situation and advise you of potential next steps.

What can Hudson’s Bay employees do now?

If your situation prevents you from pursuing severance, there are important steps you can take.

You can apply for the Wage Earner Protection Program (WEPP) which covers:

Unpaid wages
Vacation pay
Termination pay (up to a limit)

For 2025, WEPP provides up to $8,844.22 per eligible employee. Learn more about WEPP.

Hudson's Bay layoffs: Key dates and insights

Hudson’s Bay has announced several layoffs over recent years due to recessions, downsizing, restructuring, cost-cutting measures, and shifts in operational focus.

Below is a timeline of recent layoffs:

March 7 2025: Hudson’s Bay announces that it has filed for creditor protection to avoid bankruptcy.
January 2025: Hudson’s Bay has eliminated approximately 41 roles — citing “challenging headwinds.”
July 2024: Saks Global is merging Saks.com, Saks Fifth Avenue, and Saks Off 5th under one roof, resulting in 100 layoffs and new appointments.
May 2024: Hudson’s Bay is eliminating less than one per cent of its workforce as part of a “realignment” of its organizational structure.
March 2024: Hudson’s Bay is preparing to close its Burlington Centre location in June. The company said it is doing its best to offer transfer opportunities to affected staff.
June 2023: Samfiru Tumarkin LLP has learned that HBC may be closing its Lougheed Mall location in Burnaby, B.C. by the end of 2023.
May 2023: Hudson’s Bay is eliminating 250 corporate jobs as it takes additional steps to “flatten the organization and streamline operations.”
January 2023: Hudson’s Bay is cutting approximately 250 jobs, or two per cent of its total workforce, in an effort to increase efficiencies within its operations.
February 2022: Hudson’s Bay Company announced the closure of its historical Toronto location. The iconic location, which opened in 1974, closed its doors on May 31, 2022.
January 2021: Hudson’s Bay Company is laying off more than 600 Canadian workers, less than five per cent of its total workforce, amid ongoing store closures due to COVID-19 lockdowns.
June 2017: Hudson’s Bay Company is eliminating 2,000 jobs throughout North America to help offset various challenges it is facing within the retail sector.
September 2015: Hudson’s Bay Company announced that it is cutting 265 jobs at its corporate offices across North America, including Toronto.

Our advocacy: Why we push for the Sears Act

At Samfiru Tumarkin LLP, we’ve consistently championed the rights of non-unionized employees impacted by major corporate closures—first with Future Shop, Target, and Sears Canada, and now with Hudson’s Bay.

The collapse of Sears Canada revealed how flawed the system is for employees during bankruptcies.

Thousands of Sears workers lost their jobs and received little to no severance or pension because they were treated as unsecured creditors.
Hudson’s Bay employees now face the same reality.

That’s why we continue to advocate for legislative reform through the Sears Act—our proposal to classify employees as secured creditors in cases of bankruptcy and CCAA proceedings.

Our advocacy for the Sears Act is about creating fairness and protection for Canadian workers in future insolvencies.

What’s the Sears Act?

The Sears Act would:

Ensure employees are given priority status as secured creditors.
Increase the likelihood that workers receive the severance pay, termination pay, and pensions they are rightfully owed.

📖 Learn more about our push for the Sears Act.

What’s next for Hudson’s Bay employees?

A court decision on Hudson’s Bay’s liquidation plan is expected shortly.

If liquidation is approved, store closings and layoffs will happen quickly.
Hudson’s Bay has already paused its loyalty program, and gift cards will no longer be accepted after April 6, 2025.

At this point, it’s unlikely Hudson’s Bay will emerge from this process as a functioning company.

Hudson’s Bay layoffs and severance: employee FAQ

1. Why is Hudson’s Bay closing?

Hudson’s Bay is closing because it owes nearly $1 billion to creditors and failed to secure financing to restructure its business. Despite plans to liquidate half of its stores and lease some prime retail locations, the company was unable to obtain the necessary funding. As a result, Hudson’s Bay is now facing a potential full liquidation of all its Canadian operations.

2. How much debt does Hudson’s Bay have?

Hudson’s Bay owes nearly $1 billion in debt to about 2,000 creditors. According to court filings, the company has $950 million in outstanding debts, including $724.4 million in mortgages. Its creditors include major brands like Adidas Canada, Estée Lauder, L’Oréal Canada, Nike Canada, and Ralph Lauren, as well as banks, municipalities, and Canada Post. With only $3 million in cash on hand, Hudson’s Bay filed for creditor protection in 2025 to address its massive debt and financial challenges.

3. What happens to Hudson’s Bay employees if the company closes?

If Hudson’s Bay liquidates, thousands of employees will lose their jobs. Non-unionized employees may not receive full severance and will be considered unsecured creditors.

4. Can I get severance pay if Hudson’s Bay goes bankrupt?

You may be entitled to severance pay, but during bankruptcy, employees are unsecured creditors. Most won’t receive full severance. The Wage Earner Protection Program (WEPP) can provide limited compensation.

Disclaimer: The materials above are provided as general information about the rights of non-unionized employees in Canada. It is not specific to any one company and SHOULD NOT be read as suggesting any improper conduct on the part of any specific employer, or a relationship between Samfiru Tumarkin LLP and a specific employer.