Novelis Cuts Kingston Staff as US Tariffs Hit Demand

Novelis is eliminating approximately one-third of its employees at its Kingston, Ontario, facility in response to rising US tariffs on Canadian aluminium. The company announced on September 18 that it is reducing its salaried staff by ten positions and temporarily laying off around 70 hourly workers. This action directly impacts the site's total headcount, reflecting a sharp contraction in operational capacity.

The primary driver for these cuts is the imposition of 50% Section 232 duties on aluminium imports from Canada, which took effect on September 15. Novelis stated that these trade barriers have significantly compressed demand for its specialty aluminium products. The facility, which supplies the marine, transportation, and industrial sectors, is seeing reduced order volumes as customers face higher landed costs in the US market.

Tariff impact on operations

This workforce reduction follows an earlier cut in June 2025, when Novelis laid off 21 employees after US tariffs on aluminium and steel were initially raised from 25% to 50%. The company explicitly linked that previous round of layoffs to the same Section 232 regulations. The current measures represent a further escalation in cost-saving efforts as the company adjusts to the sustained high tariff environment.

Fiona Bell, head of communications for Novelis North America, indicated that the long-term viability of the Kingston plant remains uncertain. She noted that keeping the facility operational preserves the company’s ability to respond if market conditions improve. The strategic decision to maintain some capability, despite current losses, suggests the company is hedging against potential future shifts in trade policy or demand patterns.

Strategic uncertainty and future outlook

The company’s approach reflects a cautious stance amid volatile trade conditions. By temporarily laying off hourly workers rather than permanently eliminating roles, Novelis retains the option to scale up production if US demand recovers. This flexibility is crucial for a business dependent on cross-border trade, where policy changes can rapidly alter cost structures and profitability.

Context from industry materials

Reports from GN auto stocks/materials: aluminum production highlight the broader challenges facing the sector. The Kingston facility is a key player in specialty aluminium production, but the current tariff regime is testing the resilience of North American supply chains. The company’s continued presence in the region, despite significant workforce reductions, underscores the complex balance between immediate financial pressures and long-term strategic positioning.