Palliser Furniture issues layoffs amid U.S. tariffs pressure

Winnipeg-based manufacturer Palliser Furniture has laid off staff as tariffs continue to impact the furniture industry.

Some 40 workers have been let go from the company, known for its upholstered furniture and eight-decade history in the city. It supplies retailers including EQ3, a brand which it owns.

At the same time, Palliser Furniture is hiring 20 people to fill different manufacturing roles at its Winnipeg plant. The company also has a manufacturing operation in Mexico.

The restructuring is the result of the 25 per cent tariffs U.S. President Donald Trump implemented in October on kitchen cabinets, bathroom vanities and upholstered furniture, said Peter Tielmann, president and CEO of Palliser Holdings Ltd.

The company has moved some aspects of its production to Winnipeg from Mexico and vice versa, Tielmann said.

Employees who were laid off did work such as building wood frames, cutting foam and assembling goods. The company is hiring staff to cut and sew material, work that was previously done solely in Mexico.

“The EQ3 brand is built around ‘made in Canada,’ so we are making all the products in Canada,” Tielmann said. “In order to be able to make the complete products here, we needed to be able to do cutting and sewing here again.”

Palliser Furniture expects to start bringing laid off staffers back in the summer in preparation for fall, which is the company’s busiest time of the year, Tielmann said.

If all goes according to plan, the company will end 2026 with the same amount of employees it started the year with.

The size of Palliser Furniture’s workforce is subject to the seasonal nature of the company’s work, Tielmann said, adding last year, the company did not lay off anyone in a manufacturing role.

“We wouldn’t be probably laying anybody off despite the seasonalities if we wouldn’t be dealing with the results of the tariffs,” he said.

At the beginning of 2025, Tielmann told the Free Press roughly 60 per cent of Palliser Furniture’s Manitoba-made goods were shipped to the U.S.

In Mexico — the company’s larger site — some 70 per cent of items travelled north.

Those percentages have since changed, Tielmann said this week, though he didn’t give a new estimate.

In August, the Manitoba government ordered a $15-million loan guarantee requested by Lexington Real Estate Holdings Ltd., which owns Palliser Furniture. At the time, Jamie Moses, provincial minister responsible for trade and job creation, said the loan would protect 190 manufacturing jobs at Palliser.

When asked about the loan guarantee this week, Tielmann declined to comment.

In an interview on Thursday, Moses noted Palliser’s long history in the province and said he understands that the company is facing tariff-related challenges.

“Our expectation with Palliser when we signed … this agreement for the loan guarantee is to protect those 190 manufacturing jobs,” Moses said.

“Since they’ve made the signal that they’re reducing some of that employment, we expect them to restore those jobs as a priority and make sure that they fulfill their commitment to maintaining Manitoba manufacturing jobs here in the province.”

Palliser Furniture was founded in 1944 by Abram Albert DeFehr. At its peak, the company had more than 3,500 workers in Winnipeg, making it the largest private-sector employer in the city at the time.

Last month, Palliser Holdings Ltd. announced new leadership at Palliser Furniture and EQ3. Cary Benson was appointed president and CEO of the former; Jim Hunt is now president of the latter.

Meanwhile, the unemployment rate in Manitoba was 5.7 per cent in December — a 0.4 per cent decrease from the previous month, according to Statistics Canada.

aaron.epp@freepress.mb.ca

Aaron Epp
Reporter

Aaron Epp reports on business for the Free Press. After freelancing for the paper for a decade, he joined the staff full-time in 2024. Read more about Aaron.

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