Wesgroup announces layoffs due to economic uncertainty

Key Takeaways:

• Wesgroup Properties has laid off staff due to severe financial pressures in the real estate sector, including rising construction costs and a stalled condo market, calling it a “cost-of-delivery crisis.”
• The condominium market in major Canadian cities is facing a sharp downturn, with projects being delayed or cancelled in Vancouver, Toronto, and Calgary as high interest rates, inflation, and weak pre-sale activity make developments financially unviable.
• Wesgroup remains financially stable and will complete active projects, but is pausing future developments while offering to support laid-off employees by connecting them with job opportunities in related industries.

The Whole Story:

Vancouver-based real estate developer Wesgroup Properties has laid off an undisclosed number of employees in response to what CEO Beau Jarvis describes as a “cost-of-delivery crisis” gripping the Canadian housing industry.

In a message shared publicly Friday, Jarvis said the company made the “extremely difficult decision” to reduce the size of its workforce due to prolonged economic uncertainty, rising development costs, and a stalled condo market.

“This was an absolute last resort,” Jarvis wrote, adding that Wesgroup had already implemented cost-cutting measures, streamlined internal processes, and sold off significant assets in an attempt to preserve jobs.

Despite those efforts, Jarvis said economic conditions made many housing projects across Canada no longer viable. “We are delivering housing at a cost that people cannot afford to purchase,” he said. “Housing projects across the country are being cancelled or delayed.”

The layoffs are not a reflection of employee performance, Jarvis emphasized, but rather a symptom of systemic issues affecting the broader real estate sector.

Wesgroup, which has operated for more than 60 years, says it remains financially stable and plans to complete all projects currently underway. Future projects, however, are being paused — a move Jarvis said contributed to the decision to downsize.

To support affected employees, the company is offering to connect them with potential employers in related fields, including construction, development, finance, leasing, and technology.

Wesgroup joins a growing number of Canadian developers facing delays, cancellations, or restructuring amid steep construction costs, high interest rates, and slowing home sales. Industry leaders and advocacy groups have warned that housing affordability efforts may stall unless governments address the cost and regulatory burdens tied to new development.

Jarvis closed his statement by expressing hope for a market recovery but acknowledged the sector faces continued uncertainty. “Until then,” he said, “we are focused on navigating these uncertain times with resilience and integrity.”

Canada’s condominium market is under significant strain, particularly in major cities like Toronto and Vancouver, where developers are shelving or cancelling projects due to mounting financial pressures. In Toronto, data shows pre-sale condo sales fell 71% in 2023 compared to the previous year — the lowest level in a decade — as buyers retreated in the face of high interest rates and unaffordable prices.

In Vancouver, developers have paused numerous high-rise projects in response to construction cost inflation and weak investor demand, with some projects failing to reach required pre-sale thresholds. Calgary, which had seen a surge in condo activity, is now experiencing growing caution as lending conditions tighten.