Skip to main content

Canaccord Genuity Group Inc. has made deep staffing cuts to its British operations and is planning significant reductions in Canada and the United States amid an industry-wide collapse in revenues.

Sources close to the company said the Vancouver-based independent brokerage has laid off roughly 55 people in Britain – or 20 per cent of its head count there.

Canaccord is also in the process of cutting investment bankers, analysts and traders in North America – but unlike the mass-layoff approach in Britain, the job losses in Canada and the United States are being rolled out more slowly.

"They've selectively been laying people off every week," said Christopher Brown – former senior international oil and gas analyst in Calgary – who found out he was being let go on Tuesday. He had been with Canaccord since 2012.

The cuts come amid a brutal operating environment for independent brokerages. Key commodities such as crude oil and metals are in protracted bear markets that have hit revenue, particularly in equity underwriting. Last month, Canaccord rival GMP Capital Inc. unveiled a drastic restructuring, which included slashing one-quarter of its staff.

Canaccord recently parted ways with three senior Canadian staffers including Jens Mayer, its global co-head of investment banking. Last month, the brokerage laid off Scott Davidson, global head of corporate development and strategy, who had been with the brokerage since 2002.

In addition to its selective front office cuts, sources said Canaccord is planning to announce a large one-time cut to its North American back-office team. That will affect individuals in departments such as compliance, IT and accounting in Toronto and New York.

When reached via e-mail, Canaccord chief executive officer Daniel Daviau said he could not make any comment in advance of the company's quarterly financial results, which will be unveiled on Thursday.

Shares in Canaccord fell by more than 7 per cent on Wednesday. The company has lost about half of its market value since mid-June.

"The earnings outlook has gone from bad to worse," Paul Holden, an analyst with CIBC World Markets Inc., wrote in a note to clients.

The current quarter is off to "a terrible start with financings falling off a cliff in Canada, U.S. and U.K.," he added.

A number of analysts also predict that Canaccord will incur sizable goodwill writedowns over the next couple of quarters. Such writedowns are necessary when the value of a business franchise has fundamentally deteriorated.

Canaccord's dividend, too, may be reduced or eliminated in order to cut costs. Rival independent GMP did away with its dividend last month.

Mr. Brown said he has no hard feelings toward Canaccord and that he wasn't surprised that he lost his job considering how much revenue has dropped over the past year.

"It is understandable that they are cutting back significantly," he said.

Report an editorial error

Report a technical issue

Editorial code of conduct

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:00pm EDT.

SymbolName% changeLast
CF-T
Canaccord Genuity Group Inc
+1.71%8.9
CM-N
Canadian Imperial Bank of Commerce
+1.3%50.72
CM-T
Canadian Imperial Bank of Commerce
+1.13%68.67

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe