Hudson’s Bay to Pay $3 Million in Executive Bonuses as Thousands of Workers Face Layoffs Without Severance
Hudson’s Bay Company, the iconic Canadian retailer now in creditor protection, will award up to $3 million in bonuses to 121 managers and executives while offering no severance to more than 9,300 workers who are about to lose their jobs.
The company confirmed the bonus payments as part of its restructuring efforts. Court documents filed with the Ontario Superior Court of Justice reveal the bonuses are aimed at retaining key staff “critical to the success” of the wind-down or restructuring process. The payouts will be made by September 30, or sooner if liquidation is completed.
Among those set to benefit, ten senior leadership staff will share over $1 million, while the remainder will go to store managers and corporate employees.
Meanwhile, employees—many with years of service—will receive no severance, forcing them to join the ranks of unsecured creditors and possibly recover just a fraction of what they’re owed.
“That is incredibly egregious,” said Bea Bruske, President of the Canadian Labour Congress. “They need to go back and make sure all their workers get some of that $3 million.”
For employees like Kevin Grell, 61, who has worked at a Bay distribution centre in Toronto for over eight years, the news is devastating.
“It’s unbelievable. It’s a kick in the ass,” said Grell, who has already started job hunting without success. “I’ve had nights where I wake up in the middle of the night with worry.”
Grell, like many others, is frustrated by the lack of severance—money that, under normal circumstances, would be legally required under Ontario employment law, typically amounting to one week of pay for each year worked, up to a maximum of 26 weeks.
But because Hudson’s Bay is undergoing restructuring under creditor protection, severance becomes optional and subject to the company’s financial capacity.
Employment lawyer Adrian Ishak notes that while the decision feels cold, it’s common in bankruptcies.
“In unfeeling economic terms, it makes sense—you want to retain people who can oversee restructuring,” said Ishak, with Toronto’s Piccolo Heath law firm.
He warns, however, that changing laws to prioritize worker severance over secured creditors like banks could deter future investment and financing.
Still, that argument offers little comfort to those now facing unemployment without a safety net.
Hudson’s Bay has not responded to CBC’s inquiries about the employee non-disclosure agreements or detailed severance plans. The company says workers may apply to the federal Wage Earner Protection Program (WEPP), which provides partial compensation when companies go bankrupt—but only after layoffs are finalized, a process that could take months.
Lawyer Andrew Hatnay, who represents affected employees, says this delay adds to their stress.
“They’re upset. They don’t want to lose their jobs in a difficult economy,” he said.
The Hudson’s Bay situation mirrors that of Sears Canada, which faced widespread criticism in 2017 after paying executive bonuses while leaving 12,000 workers without severance. Many of those employees also saw pension reductions.
In response, the federal government passed legislation in 2023 to protect defined benefit pensions in bankruptcies. However, severance protections were not included, despite pressure from opposition MPs.
“It was incredibly disappointing and frustrating,” said Bruske. “Now is the time to ask election candidates what they’ll do about worker protections like severance pay.”
As Hudson’s Bay begins liquidating all but six of its stores, the fallout is being closely watched—not just by employees, but by labour advocates and lawmakers who say worker rights must become a national priority in the face of corporate collapse.