Some layoffs at MEC but more permanent staff to be hired, CEO says in restructuring plan

Mountain Equipment Co-op (MEC) is laying off some of its 2,400 employees — but offering permanent positions to many of its casual workers — as it restructures in a bid to restore its financial health.

The outdoor retailer, which lost more than $11 million in the past fiscal year, is aiming to cut costs, and change what it stocks and how it staffs, according to an online statement from CEO Phil Arrata.

The statement was released after the company's 22 stores across Canada were shut down on Sunday afternoon for a nationwide all-staff meeting, according to employees at several outlets. Store managers read a statement outlining the new direction Arrata plans to take MEC.

In some stores that meant a handful of layoffs. MEC declined to confirm a total number.

But in his statement, Arrata said the co-op would move away from using casual employees and hire more permanent staff. MEC is hoping to cut down on staff turnover and sharpen customer service.

More than 950 casual staff will be given full- or part-time jobs, with benefits, Arrata said. 

"While MEC is not profit-driven in the same way as the retailers we compete against, we still must be profitable to ensure we deliver great service to our members," Arrata said, citing the retailer's co-op model, in an open letter to staff posted online Jan. 20.

MEC also plans to sublet its $28-million head office on Great Northern Way in Vancouver.

MEC has been struggling and recently went through arbitration after workers at its Vancouver and Victoria stores became the first in its network to unionize. Employees were seeking better wages and working conditions.

Arrata, the former chief financial officer at Best Buy Canada, joined MEC in the summer of 2019 and said he was given the mandate to infuse the chain with more profitability.

"I think we could take on the competition. I think we could do better," he told CBC in a recent interview.

MEC reported an $11.5-million net loss on $462.4 million in sales in 2018/19.

The outdoor retailer is facing increasing competition from online giants such as Amazon and Walmart, as well as Canadian Tire, Sport Chek and the French sporting goods chain Decathlon, which has outlets in Quebec and Ontario.