Celestica and CAE reduce workforces in Montreal

Job cuts are rattling through Montreal this week as both Celestica Inc. and CAE Inc. announced plans to reduce their workforces by a total of approximately 1,000 jobs.

Celestica, a manufacturer of computer and telecommunications equipment, will close its operations in Kirkland, Que., in about four to six months, said a company spokesperson who preferred to remain nameless.

“The work will be transferred to other sites in North America,” she added, without providing specific details about where those jobs will end up. Celestica has one other Canadian location in Toronto.

The total number of jobs affected are about 700, with about 400 full-time, 250 contract and approximately 40 contractors.

“It was a difficult decision [to close down the plant] which is why it hasn’t happened before,” the spokesperson explained. She said the industry has been plagued with upheavals in recent years and Celestica has had to focus on the long-term and where the company’s footprint needs to be.

The job cuts are part of the company’s attempt to reduce costs and consolidate operations and about 70 per cent of the company will be in lower-cost geographies such as Europe and Asia.

Celestica manufactures products for many of the large IT vendors including Cisco Systems Inc. and Hewlett-Packard Co.

In a separate announcement, flight simulator maker CAE announced on Monday layoffs of 300 employees — 250 of those employees are based in Montreal.

A large part of the staff reductions are being attributed to a recent decision by the Canadian government to not award the company with the CF-18 pilot simulation equipment contract, CAE said in a statement.

The company did not say if all 250 jobs would be from the Montreal area, but it said it anticipates an approximate $8 million restructuring charge to be taken in the fourth quarter of fiscal 2004 to cover severance and other costs related to the layoffs.

CAE’s president and CEO Derek Burney said in a statement that CAE’s bid for the CF-18 contract was significantly lower in cost to Canadian taxpayers and substantially higher in Canadian content.

“It is therefore regrettable when a decision by our own government has the perverse effect of reducing Canadian jobs and potential Canadian exports in one of the very few high tech sectors in which a Canadian company is a recognized global leader,” he said.

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