WATERLOO REGION — After two decades, Manulife is leaving downtown Kitchener.

On Thursday, the financial services giant announced it will tear a chunk out of its 13,000-strong Canadian workforce by trimming 700 nation-wide jobs as it streamlines and digitizes its customer service operations.

The company says the objective is to move the "vast majority" of Kitchener staff from the old King Centre mall to its newly-consolidated Canadian headquarters in the 500 King Street North office in Waterloo — the Manulife flagship since the '80s. They will join about 1,805 staff already there. The Waterloo office will be renovated.

Manulife says it is scurrying to play digital catch-up in the modern high-tech insurance world.

"Our industry, frankly, has not kept pace," Manulife Canada chief executive officer Michael Doughty said in a telephone interview from the Waterloo offices on Thursday afternoon.

"We need to really double-down and eliminate customer effort, create customer experiences that are intuitive, digital, automated — put the power in the hands of the customers. And that, by its nature, means they don't have to phone us as much. They don't need to send us as much paper forms. So our workforce is going to change as a result of that."

How many K-W jobs will be lost as the consolidation plays out? The company could not say, since voluntary exit programs and "natural" attrition were to determine where those 700 nation-wide job cuts come.

Manulife staff approached outside the Kitchener offices on Thursday afternoon declined to comment, referring questions to media relations. They had been informed of company plans earlier in the day.

"I am shocked," said Elvis Ellison from his 14-year-old Charles Street bistro, a short walk from Manulife's offices, about losing 20 years of Manulife purchasing presence at King and Water streets.

"It's gonna be a blow to everybody, not just me alone."

The grab-and-go lunch sales Ellison makes to some of the 1,520 full-time Manulife employees nearby will disappear by the end of 2019.

"What's key is keeping these jobs in Waterloo Region," said Kitchener Mayor Berry Vrbanovic, touting a broader economic perspective.

"The gain is for the region in that Manulife has decided to stay here."

And what happens to the 355,000 square feet Manulife owns in Kitchener, if it has no staff there?

The best strategy to maximize the company's investment in that building, with 6,000 square feet of new windows added a year ago, is yet to be determined.

Both properties were under-utilized, Doughty said. Either one could have worked quite well for a consolidated Manulife headquarters, he conceded.

"In terms of the choice, it was a tough one," said Doughty, who worked in the Kitchener building for many years. "We own both buildings. And from a reinvestment or repurposing perspective, we do think the very attractive marketplace now is in Kitchener, with the tech hub and things like that. We think there's more we can do in terms of repurposing that building than there may be if we moved from the 500 King location."

Loading... Loading... Loading... Loading... Loading... Loading...

They could sell it outright, Doughty said. They could repurpose it. They could lease it out in whole or in part. They could rent space to growing tech companies, with Communitech and the Tannery District nearby.

"We'll be working very closely with the city as we go through that exercise," Doughty said.

"There's lots of demand with companies that are growing," Vrbanovic said. "We're in a different world what we were a decade ago, in terms of the downtown, with all the projects that are slated to start construction."

The city expects the Manulife void left behind in Kitchener will be filled. Vrbanovic believes there is no rush to figure it out.

"They're shooting for the end of 2019 and we know the way these things go. It'll likely end up being into 2020 by the time everything is done. This certainly gives them and us — and the real estate community — lots of time to explore whether they're going to go the redevelopment route on that site or look at putting additional tech companies in there."

But not everyone in downtown Kitchener was mourning Manulife's impending exodus to Waterloo.

Tyzun James, who owns Cafe Pyrus, figures those older insurance employees don't fit in with the new urban vibe anyway, or participate in the downtown for the most part.

"They're the ones who are happy when we get things like a Starbucks. They were cheering that we have a Subway downtown when they have us and Breadbaron and a number of good quality places."

James feels the over-40 Manulifers don't get the young, downtown scene. They get mad at traffic and oppose the LRT. "Having something like that flip over to more independent offices and more startup space, those are the kind of people that make a vibrant core."

jhicks@therecord.com

- Manulife to cut 700 jobs in automation push