Why Is TD Bank Cutting 2% of Its Workforce?
Toronto-Dominion Bank (TD) has announced a significant shake-up, revealing plans to reduce its workforce by approximately 2%, impacting about 2,000 employees. This strategic move comes as part of a broader restructuring initiative aimed at reducing costs and boosting investments in digital innovation and artificial intelligence (AI).
This announcement follows closely on the heels of a major anti-money laundering settlement in the United States, prompting sweeping internal changes under new CEO Ray Chun.
What’s Driving TD Layoffs?
According to TD, the layoffs are part of a focused effort to streamline operations and modernize systems. The bank aims to achieve long-term cost savings of up to C$650 million annually by simplifying business processes and expanding automation.
CEO Ray Chun explained, “We’re taking a close look at how we operate, identifying opportunities to automate and re-engineer our processes to build efficiency and support innovation across the organization.”
While TD did not specify whether the layoffs are occurring more in Canada or the U.S., the move reflects a strategic shift in how the bank plans to serve clients and invest in future growth.
How Much Will This Restructuring Cost TD?
To fund the transformation, TD expects to incur pre-tax restructuring charges between C$600 million and C$700 million over the next several quarters. These costs include the decision to wind down its U.S. point-of-sale financing business, among other operational changes.
Despite the short-term costs, analysts are optimistic, noting that these measures could help offset previous investments related to TD’s compliance and anti-money laundering programs.
What Does This Mean for TD’s Financial Performance?
Interestingly, the announcement of the layoffs came alongside stronger-than-expected second-quarter results. TD reported adjusted earnings of C$1.97 per share, surpassing analyst expectations of C$1.76. Its wholesale banking division, which includes capital markets and investment banking, saw a record-breaking C$2.13 billion in revenue, a 10% increase from the previous year.
A large part of this gain came from trading revenues and the final sale of TD’s equity stake in Charles Schwab.
Even with solid earnings, TD is taking a cautious stance on the future. The bank allocated C$1.34 billion in loan loss provisions, up from C$1.07 billion last year, as a buffer against potential defaults amid economic unpredictability. CFO Kelvin Tran noted that while loan growth continues, TD is preparing for slower business activity as clients delay spending and investment decisions.
Ray Chun, who took over as CEO in February, has launched a strategic review focused on simplifying TD’s structure and improving agility. The bank is expected to reveal more about its long-term direction at its Investor Day in September.
Were You Impacted by TD Bank’s Recent Layoffs?
If you’re one of the 2,000 employees affected by TD Bank’s latest restructuring, it’s crucial to understand your legal rights especially when it comes to severance pay. In Ontario, non-unionized employees are often entitled to significantly more than the initial package offered by their employer.
Your severance entitlements depend on several key factors, including your position, length of service, age, and compensation level. In many cases, employees may be legally owed up to 24 months’ pay even if the employer suggests otherwise.
At Whitten & Lublin Employment Lawyers, we’ve helped countless professionals in the banking and finance industry navigate layoffs and secure the full compensation they’re owed. If you’ve been affected by TD Bank’s downsizing, contact us today at (416) 640-2667 or reach out online .