Over 100 employees were laid off from Prospera Credit Union on Wednesday (May 20) – mere months after its historic merger with Westminster Savings Credit Union in January 2020.
The layoffs are the result of a “series of exceptional events,” including an economic downturn in early 2020, a significant drop in interest rates, a lack of turnover and the challenges stemming from the COVID-19 pandemic, according to Jeff McDonald, communications manager for Prospera Credit Union.
“Our plan was to take our time working through integration, taking advantage of natural attrition and turnover to reduce impacts on our valued employees,” McDonald said. “Prospera faced these same difficult circumstances, along with other financial institutions, with the added challenge of running largely in parallel, with inefficiencies, duplication and overlapping operations inherent in a large merger.”
Prospera Credit Union – headquartered in Abbotsford – and Surrey’s Westminster Savings Credit Union were given permission to merge by the B.C. Financial Institution Commission in September 2019, after 18 months of negotiations between the boards of directors.
Two-thirds of both memberships voted in favour of the deal in November, setting the way for the largest merger in Canadian history between credit unions.
The new organization became the sixth largest credit union in the country with $9.5 billion in managed assets, 120,000 members, 900 employees and 29 branches.
Credit unions do not qualify for government assistance during the pandemic because they “measure profit and loss differently from most other organizations,” according to McDonald. He said that many credit unions have been lobbying for a change in the government’s qualifications for these subsidies.
McDonald said the joining of the two financial institutions was going to result in layoffs eventually, but the recent events hastened the need to cut “parallel operations, overlap, inefficiencies and duplication.”
“Prospera has made extensive efforts to… forestall the need to move ahead with staff reductions,” he said. “These include cutting costs across the organization, eliminating discretionary spending, holding and eliminating vacant positions, introducing a targeted retirement program, freezing wages and targeted compensation reductions.
“Sadly, as the impact of COVID-19 continues, these efforts were not enough to forestall the need for staff reductions.”
McDonald said the credit union was open with its employees about the need to make “tough decisions” following the merger, and let them know in early May that layoffs were a real possibility.
He said that each employee would will receive an extensive separation package, which includes severance, access to their employee and family assistance program, career transition support, and assistance accessing the Canadian Emergency Response Benefit.
“This was an extremely difficult decision for Prospera and we deeply regret the impact this will have on employees and their families.”
A previous merger between the two financial institutions was called off in early 2015.