London's Job Crisis: 5,000 Jobs Lost in One Month – What's Next for the Region?

The London region is facing a significant economic downturn, with about 5,000 jobs lost in just one month, pushing the unemployment rate to a five-year high of 8.2%. Experts warn that this is just the beginning of a challenging period for the local economy.

The Big Picture

Christine Wilton, director of workforce development at the London Economic Development Corp., describes the situation as being at the "front edge of a wave." She notes, "I don’t want to be doom-and-gloom but it will get worse before it gets better." The region has lost approximately 10,600 jobs since October 2025, with Southwestern Ontario shedding about 10,000 jobs in the last six months of the year.

Key Factors Driving Job Losses

Manufacturing Hit Hard

The trade and tariff dispute with the U.S. has significantly impacted manufacturing, which accounts for about 13% of total employment in the London region compared to 8% provincewide. Major layoffs include:

• 1,100 workers from the Cami auto assembly plant in Ingersoll
• 200 jobs from the Accuride plant closing
• 130 workers from Autoneum
• Over 40 jobs from Sodecia
• 50 layoffs from London Machinery due to production shifts to the U.S.

Rishi Sondhi, economist at TD Bank Group, emphasizes that "the impact of the trade war is evident" in these sectors.

Construction Sector Struggles

Construction employment dropped from 22,700 in December to 21,600 in January, a loss of 1,100 jobs in one month. Over the previous six months, the sector lost 4,000 jobs. Jared Zaifman, CEO of the London Home Builders’ Association, points to lack of action on federal first-time home buyer programs and the "stress test" on new buyers as contributing factors.

Professional Services Decline

The professional, scientific and technical services sector saw a dramatic drop from 31,400 workers at the end of 2025 to 25,700 in January. Wilton describes this as a "giant swing" and notes it's a "lagging indicator" tied to business growth plans.

Sectors Showing Stability

Education and Healthcare

These public sectors added jobs recently, with education employment increasing from 29,500 in 2025 to 33,700 in January, and healthcare growing from 49,700 to 50,400. However, Wilton cautions that announced cuts at Fanshawe College (potentially 500 jobs) and the Thames Valley District school board haven't yet been reflected in the numbers.

Retail and Hospitality

Retail and wholesale trade employment grew from 46,800 in 2025 to 51,200 in January, while accommodation and food services dipped slightly from 19,600 to 18,800. Wilton expects adjustments in these sectors in the future.

Economic Outlook

Signal49 Research (formerly Conference Board of Canada) predicts a "turbulent time" for the London region in 2026, with:

• GDP growth of just 1.3% in 2026 (down from 3.2% in 2023)
• Job growth of only 0.5% in 2026 (compared to 3.4% average from 2022-2024)

Population Growth Concerns

London's population growth is projected to remain flat until 2028, which Signal49 Research notes will "put downward pressure on a number of London's industries, especially those dependent on students."

Reasons for Optimism

Despite the challenges, there are positive developments on the horizon:

• Volkswagen's electric vehicle battery plant in St. Thomas (opening 2027, 3,000 jobs)
• Vianode synthetic graphite plant in St. Thomas (1,000 jobs)
• Potential new free trade agreement with the U.S. that could revive manufacturing
• 3,428 current job openings on the Elgin-Middlesex-Oxford Workforce Planning and Development job board

Wilton emphasizes that London's diversified economy will help absorb the turbulence: "These numbers show we have a diversified economy, we're not dependent on any one sector. That will help us absorb this turbulence."