Winnipeg automation company lays off 1/3 of staff as trade war leads to 'spending freeze'

A Winnipeg-based robotics company says it's laid off about a third of its employees, as orders for its products dry up amid uncertainty stemming from the Canada-U.S. trade war.

Eascan Automation Inc. says between 20 and 23 employees were let go last month, with business recently dropping by about 25 per cent from a peak driven by pent-up demand after COVID-19 pandemic restrictions.

The company, which provides custom-built machines to manufacturers, says its business primarily comes from Manitoba and other parts of Canada, but there's still been a slowdown that began around the time Donald Trump was re-elected U.S. president.

Manufacturers doing "any kind of welding or bending or fabricating, a lot of their stuff was going to the States," said Jason Andres, Eascan's general manager.

"A lot of companies are saying, 'OK, we don't need a robot this year. We can wait another year.'"

Andres said that includes steel and aluminum processors, whose industry was recently hit by a 25 per cent tariff on exports of those metals to the U.S.

WATCH | Eascan says it expects to weather trade war despite layoffs:

The general manager said Eascan has recently lost out on $3 million to $4 million in orders he was confident the company would get, after clients decided to pull out.

The company is seeing "kind of a complete spending freeze," Andres said.

"Even just those little [purchase orders] have kind of been more challenging to get, and I think that's really slowed us down, because sometimes we would use that to fill in the gaps."

Loren Remillard, president and CEO of the Winnipeg Chamber of Commerce, said that by late January, a majority of its members said they were expecting or already feeling the impacts of U.S. tariffs on Canadian goods.

Nearly half of respondents to a survey at that point said they expected to lose customers, with many also anticipating layoffs or hiring freezes, he said.

"The longer this goes on … those freezes will turn into, unfortunately, potential workforce reductions," he said.

Remillard said that while front-line exporters may be the first ones "paying the price," all associated industries and businesses that support those companies — like Eascan — will be hurt too, as the impact of the tariffs moves through the economy.