Tariffs Trigger Layoffs, Job Shifts at Palliser

Palliser has laid off about 40 workers in Winnipeg, as the company adjusts its manufacturing operations to offset the impact of U.S. tariffs, according to reporting by The Free Press.

The company, which produces upholstered furniture and supplies retailers, including its own brand, EQ3, said the job losses affect workers involved in building wood frames, cutting foam and assembling finished goods.

Peter Tielmann, president and CEO of Palliser Holdings Ltd., told The Free Press the changes are directly tied to the 25 per cent tariffs imposed in October by President Donald Trump on kitchen cabinets, bathroom vanities and upholstered furniture.

The layoffs come as the manufacturer simultaneously hires new staff for different roles at the same facility, underscoring a broader restructuring rather than a full-scale contraction.

The company has added roughly 20 employees for cutting and sewing positions, work that had previously been handled exclusively at its Mexican manufacturing operation.

Tielmann said the decision to bring cutting and sewing work back to Winnipeg is closely linked to EQ3’s positioning as a ‘Made in Canada’ brand. To complete production domestically and support that branding, Palliser needed to restore capabilities that had previously been offshored.

The company expects the layoffs to be temporary. Tielmann said Palliser plans to begin recalling workers in summer ahead of the fall season, typically its busiest period.

If conditions remain stable, Palliser anticipates ending 2026 with roughly the same workforce size it had at the beginning of the year.

Tielmann noted that absent the tariff pressure, the company likely would not have laid off manufacturing staff despite normal seasonal fluctuations.

Earlier this year, Palliser reported about 60 per cent of its Manitoba-made goods and roughly 70 per cent of production from its Mexican facility were destined for the U.S. market, highlighting its exposure to American trade policy.

The restructuring follows a $15-million provincial loan guarantee approved last summer for Palliser’s owner, Lexington Real Estate Holdings Ltd., which the Manitoba government said was intended to protect 190 manufacturing jobs. Trade and job creation minister Jamie Moses told The Free Press the province expects those jobs to be restored as conditions allow.