Husky Energy confirms jobs eliminated in latest round of cost-cutting
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Calgary-based Husky Energy Inc. laid off workers on Tuesday, adding to the elimination of 1,400 jobs or 22 per cent of its workforce it confirmed last fall.
“These are difficult decisions and we will continue to take the steps necessary to ensure the company’s resilience through this cycle and beyond,” said spokesman Mel Duvall in an email Tuesday afternoon.
“We are not providing specific numbers. The staff reductions were across the company’s operations.”
On social media, posts from Husky employees suggested up to 500 jobs had been eliminated.
“I was an employee up until about couple hours ago when I was let go. Layoffs are happening company wide, there were lots of people in the lobby with packages in hand crying and looking distressed,” said one anonymous posting on Reddit.
“Can confirm about 500 will be let go. Happening right now,” read another anonymous post.
Others said that the cuts had affected the information technology group and some drilling operations workers.
Last fall’s cuts included about 280 employees, most stationed in Calgary, and about 1,100 contractors. The action was described by chief executive Asim Ghosh in October as a “bitter pill” necessitated by structural change in global oil and gas market price mechanisms.
He said Husky would continue to downsize its workforce as it sells assets and enforces a salary freeze implemented last year.
In January, Husky cut $800 million from the 2016 budget it had announced in December (to about $3 billion) and confirmed plans to sell western Canadian conventional assets producing about 55,000 barrels of oil equivalent per day, as well as pipeline and storage assets in its Lloydminster heavy oil region. It is also looking at selling royalty interests that account for about 2,000 boe/d of production.
It said it realized about $100 million in proceeds from the sales of assets in late 2015.
Husky has vowed to spend future capital only on new projects that will break even at US$30 per barrel oil prices. On Tuesday, the March contract for North American benchmark West Texas Intermediate crude fell $1.75 to US$27.94 a barrel — a drop of nearly six per cent.
Husky, controlled by Hong Kong billionaire Li Ka-shing, is not the first to go back to its workforce for secondary rounds of job cuts.
Suncor Energy Inc. president and CEO Steve Williams said on an earnings call last week that the company had “significantly overachieved” on its goal of cutting 1,000 jobs last year, instead sending a net 1,700 people into the ranks of the unemployed.
Cenovus Energy Inc. cut 700 jobs last fall after announcing in July it would cut 300 to 400, taking the total for the year to 1,500 or 24 per cent of its total workforce.
The Alberta industry estimates more than 40,000 oil and gas related jobs have been lost in the past 18 months.
Statistics Canada reported last Friday that Alberta’s unemployment rate in January was higher than the national rate for the first time since December 1988 as the province lost a net 10,000 jobs. The provincial rate was 7.4 per cent, higher than the national rate of 7.2 per cent.
It said Alberta had lost 35,000 jobs in the 12 months ended in January.
Calgary’s jobless rate jumped from 7.0 per cent in December to 7.7 per cent in January, after registering 4.6 per cent in January 2015.
dhealing@calgaryherald.com
Twitter.com/HealingSlowly
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