Suncor Energy to layoff 10-15% of workforce over next 1.5 years

WATCH: Premier Jason Kenney said word that Suncor intends to lay off upwards of 15 per cent of its staff is "very disturbing." The premier said the layoffs could affect up to 2,000 Albertans.

Another Alberta oil company is having to make cuts and lay off workers to deal with low oil prices and market volatility.

Suncor employees were told Friday morning that projects would be cancelled and the company would be laying off between 10 and 15 per cent of its workforce over the next year and a half.

Spokeswoman Sneh Seetal said CEO Mark Little told employees on a conference call that reductions will start with a five per cent cut over the next six months.

Staff heard that Suncor stock is down and it is underperforming.

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The Calgary-based company had 12,889 staff at the end of 2019. Five per cent would equate to 644 positions and 15 per cent would equal 1,933.

“A few years ago we began to fundamentally change how we work, taking advantage of improved data technology, business processes, all with a view to improve our overall cost structure, accelerate free cash flow and strengthen our competitive position,” said Seetal, referring to what was dubbed the “Suncor 4.0” program.

“We always anticipated this transformation would result in a smaller workforce over time and one example … is the implementation of the autonomous haul trucks (driverless trucks employed at Suncor’s oilsands mines).

“That said, the unprecedented drop in oil prices, the continued impact of the global pandemic and economic slowdown, as well as continued market volatility, have accelerated those plans.”

The cuts are to be made across the entire organization, Seetal said, and will also affect Suncor’s ranks of contracted workers, although she was unable to give those numbers.

Employees will be offered voluntary severance, early retirement and may potentially be redeployed if their jobs are eliminated, she said.

Alberta Premier Jason Kenney called the news “very disturbing” during a news conference Friday morning.

“Today Suncor has announced their intention to layoff as much as 15 per cent of their workforce. We estimate that could affect as many as 2,000 Albertans.

“My heart goes out all of those who are affected by this terrible news, to their families, for those workers who are experiencing great anxiety about what the future holds for them and their families.”

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Kenney said there is a national jobs crisis and economic emergency. He urged the federal government to respond in the same way it would if the challenged companies were based in Ontario.

He stressed the energy crisis and the tough times Albertans are facing need to be taken more seriously by Ottawa.

“First and foremost: do no harm.”

 

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“From the very beginning of the COVID crisis, I’ve been clear this is the greatest economic crisis since the Great Depression… leading to the largest decline in energy prices in history, on top of five tough years,” Kenney said.

“It is hard to overstate the economic adversity that many Albertans are facing.”

He described Suncor as one of Canada’s largest companies and one of the largest energy producers.

“In March, before COVID, the price for benchmark oil WTI was over $70. By the middle of April, the futures market, Western Canada Select, was trading at -$30 — a $100 decline in oil prices.”

In March, Suncor put projects on hold and cut its 2020 capital budget by $1.5 billion to a range between $3.9 billion and $4.5 billion to deal with the lower oil prices.

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The premier said Canadian oil companies have been “hemorrhaging cash” and said the Suncor news was very “sad, but likely inevitable.”

“We must all come together as Albertans to support our neighbours in every way we can.

“I truly believe that while some tough months still lie ahead and many more will feel this impact of this global recession here in Alberta, I do believe, I do know, that we will get through this together and will come out stronger,” Kenney said.

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In March, Suncor put projects on hold and cut its 2020 capital budget by $1.5 billion to a range between $3.9 billion and $4.5 billion to deal with lower oil prices from a glut of oil in the market and the impact of the COVID-19 pandemic.

At the time, a spokeswoman said the cutbacks would result in fewer jobs for contract workers and could “potentially” hit employees as well.

Suncor’s operations include oilsands development and upgrading, offshore oil and gas production, petroleum refining and retail fuel sales under the Petro-Canada banner.

The news comes a few days after Royal Dutch Shell announced it would eliminate between 7,000 and 9,000 jobs worldwide by the end of 2022, a move expected to potentially result in hundreds of job losses among its 3,500 workers in Canada.

In June, BP, which has a smaller workforce in Canada, said it was cutting around 10,000 jobs from its global workforce to cope with the impact of the pandemic.

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“Jason Kenney made a bad deal,” Alberta Opposition NDP Leader Rachel Notley said.

“Suncor received over a billion dollars from the UCP’s $4.7-billion corporate handout and they’re not hiring, they’re firing.

“Everyday there is new evidence of Jason Kenney’s failure to create jobs and grow the economy. Instead of shoveling money off the back of a truck to finance corporate layoffs, the premier and his UCP need to build a plan to guarantee job creation and job protection.”

— With files from Dan Healing, The Canadian Press

© 2020 Global News, a division of Corus Entertainment Inc.

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