Cenovus set to shed 540 jobs
By end of 2015, company says its workforce will be reduced by 24%
Employees of Cenovus Energy Inc. are on tenterhooks, waiting to find out over the next few weeks if they will be affected by 540 job cuts aimed mainly at the head office ranks in Calgary.
And that’s not the end of it. An asyet-undetermined number of fieldbased employees are also due to be laid off in 2016, company spokesman Brett Harris confirmed in response to a Herald inquiry Friday.
“People know what the (540) numbers are but they don’t know individually,” said Harris.
“Obviously, it’s a terrible, terrible time for everybody and not easy decisions to make but, when your cash flow is significantly reduced, you have to make responsible decisions.”
Cenovus announced in February it would cut 800 positions, mainly targeting contractors, to deal with benchmark U.S. oil prices that had tumbled by more than half to less than US$50 per barrel.
In its second-quarter update at the end of July, it announced it had identified up to 400 more positions, mainly in Calgary, that it would have to eliminate because an expected rebound in commodity prices had not occurred.
Harris said the 540 includes the 400 announced earlier, along with some field worker positions that are being eliminated earlier than expected. Meanwhile, some new employees have been hired for specific tasks or projects.
“The best number that I can give you is that from the end of 2014 to the end of 2015, it will be a 24 per cent reduction in our overall work- force,” said Harris. “So we will go from approximately 5,200 at the end of last year to approximately 3,900 at the end of this year.”
In a note to investors earlier this week, analyst Greg Pardy of RBC Dominion Securities estimated Cenovus would save $100 million in 2016 by carrying out its planned 400 job cuts — the same math would indicate savings of $135 million for 540 employees next year.
Producer and oilfield services companies have confirmed thousands of job cuts this year as drilling activity has been halved in Canada and the United States. As fall capital budgeting begins for the winter drilling season, the announcements aren’t slowing down.
The Canadian Association of Petroleum Producers calculated three weeks ago there have been 10,000 jobs lost in exploration and production to go with 25,000 in the oilfield services jobs as estimated by the Canadian Association of Oilwell Drilling Contractors.
Earlier this week, pipeline builder TransCanada Corp. said it was expecting to lay off 20 per cent of its leadership team after eliminating 185 jobs over the summer. Tervita Corp. cut 15 per cent of its corporate staff, Penn West Petroleum announced it was reducing its workforce by more than 400 full-time employees and contractors and ConocoPhillips Canada has said it would drop 400 employees and 100 contractors.
Shell Canada has had 700 job cuts split between field positions in Fort McMurray and office jobs in Calgary. Suncor Energy cut 1,000 staff early this year.