By Divya Rajagopal and Bhanvi Satija
(Reuters) -Manulife Financial Corp will outsource its property operations in Canada to focus on its entrepreneurial investment management unit, Canada's biggest life insurer said Thursday.
The change to a new structure will result in Manulife Investment Management, which overseas the real estate portfolio, shedding 50 jobs, two sources familiar with the matter told Reuters on Thursday. The sources declined to be identified because the details are not public.
Manulife will outsource leasing services to Chicago-based commercial real estate brokerage firm JLL Inc under a short-term contract, after which services will be provided by a range of brokerage firms, the insurer said in a statement.
"As part of this repositioning, our teams working in Canada property operations will move to JLL in March 2023," Manulife said. The company did not immediately disclose how many people would be affected.
Reacting to rising interest rates, companies across the globe have rushed to rein in costs and shed workforce. The Bank of Canada has hiked its benchmark rate by 350 basis points since March to 3.75%, a 14-year high. Another increase is expected in December.
Among other financial services companies, Canada's biggest lender, Royal Bank of Canada and Bank of Montreal have recently cut jobs in the United States.
JLL Canada said it would help Manulife "achieve operational efficiencies," but did not disclose any financial details about the companies' collaboration. Manulife shares were up 1.1% in opening trade, outperforming the financial sub-index which was up marginally.
Manulife Investment Management's real estate arm uses a pool of capital to invest in real estate in 29 cities across the United States, Asia and Canada. According to its annual report, the insurer had about C$13.2 billion ($9.90 billion) worth of real estate investments in 2021.
Earlier this month, Manulife reported a drop in third-quarter profit, as escalating worries of an economic downturn impaired earnings at its wealth and asset management unit.
($1 = 1.3336 Canadian dollars)