Watch: Gary Bobrovitz reports on Wednesday’s layoffs in the oil industry.
CALGARY – It’s been a rough week for many in the oilpatch.
Talisman Energy Inc. (TSX:TLM), ConocoPhillips Canada and Nexen Energy ULC have all announced job cuts this week.
Talisman, which is set to be taken over by Spain’s Repsol SA in the coming months, is reducing its workforce by 10 to 15 per cent, mostly at its Calgary head office. That amounts to between 150 and 200 jobs – both contractors and employees.
“We’ve reduced our 2015 capital spending program. With that comes reduced activities across our business and frankly, just not enough work to support a number of the people that would be impacted,” spokesman Brent Anderson said.
Talisman employees who kept their jobs told Global News it was a solemn atmosphere inside the office tower. They said the laid-off employees were brought in one by one to hear the bad news. Some were not allowed to take their personal belongings, and were told those would be sent to them.
Watch above: Stefan Keyes reports on how the recent layoffs are starting to affect other industries in Calgary.
Meanwhile, ConocoPhillips Canada – a division of the Houston-based energy giant – is cutting seven per cent of its Canadian employees, or around 200 jobs, spokeswoman Kristen Ashcroft said.
“As you know, we’re in a challenged economic environment. We’ve had to make some tough decisions, which staff were informed of today.”
Like Talisman, the ConocoPhillips cuts affect both employees and contractors, and are primarily at the company’s Calgary office.
READ MORE: Timeline – tracking the layoffs in Alberta’s oilpatch
Some economists say there could be more cuts in the short-term as oil prices hover around $44/barrel.
“That is really going to drive the layoffs, unfortunately, and so I think over the next few months we are going to see a bit more of this activity; downsizing in the industry overall,” said Canada West Foundation’s Janice Plumstead.
Construction companies are also feeling the hit: one renovation contractor in the Talisman Tower said the oilpatch layoffs are hurting his business.
“A lot of these projects are being brought to a stop or cancelled or delayed,” said contractor Jim Hester. “The spaces are being emptied out as they don’t need those people anymore, and they are not refilling, they are just staying empty. And it does affect us in that the work that has been coming in steadily—like it has for a very long time now—isn’t there now.”
Wednesday’s cuts follow an announcement earlier this week by Nexen Energy that it was cutting 400 jobs including 340 positions in North America and 60 in the United Kingdom.
“While regrettable, these organizational changes are necessary to align the company with our reduced capital spending program. We take these decisions seriously, and all impacted employees have been treated fairly and with respect,” Nexen CEO Fang Zhi said.
Despite the cuts, Nexen said it’s compliant with the commitments it made to the federal government when CNOOC’s controversial $15.1-billion takeover of the company was approved. Industry Canada said it’s reviewing the announcement to ensure compliance with the Investment Canada Act.
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There have been widespread spending cuts across the oilpatch since oil prices began their dramatic decline late last year. The U.S. benchmark is sitting below US$43 a barrel – a steep drop from the $107 level it hit last June.
Other firms to have announced layoffs in recent months include Suncor Energy Inc. (TSX:SU), Shell Canada Ltd. and Cenovus Energy Inc. (TSX:CVE).
Alberta Premier Jim Prentice said Wednesday the mounting layoffs are “very concerning” and “sobering.”
“It’s been going on for some time,” said Prentice. “Last month, as I recall, there were 13,000 job losses. And the month of March we have seen a continuation of that trend.”
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