REGINA – Premier Brad Wall has sent a letter to Potash Corp. of Saskatchewan (TSX:POT) management blasting them for cutting jobs while preserving the dividend paid to shareholders.
Wall says tough times shouldn’t be shouldered by workers alone.
The Saskatoon-based company said Tuesday that it is cutting its workforce by about 18 per cent, laying off 1,045 people, with the biggest hits in its home province of Saskatchewan.
But Wall is upset because PotashCorp CEO Bill Doyle said the fertilizer company’s dividend is “sacrosanct” and won’t be touched.
In the letter to PotashCorp chairman Dallas Howe, Wall says the interests of shareholders were protected while the interests of employees were sacrificed.
MORE: PotashCorp slashes 18 per cent of workforce
PotashCorp says the decision to make cuts stems from soft demand for potash and phosphates, two major types of crop fertilizer.
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In a reply to the premier, Howe said the company regretted having to make the decision to cut jobs and the impact it would have on people and communities but the decision was made on current challenges in the potash industry.
PotashCorp produced more than 8 million tonnes of potash in 2007 with 1,600 employees, while in 2012 and 2013, production will be around 7 million tonnes with a workforce of 2,600.
Howe stated the number of employees impacted by the cuts was not connected to company dividends but also went on to say “it is important to regularly return cash to investors in our company.”
Did Doyle break his “Pledge to Saskatchewan”?
In February 2011, PotashCorp CEO Bill Doyle made a “Pledge to Saskatchewan.”
In a letter to Wall, Doyle committed to having 300 employees working in their head office in Saskatoon by the end of 2013, with 11 of 14 senior executives in Saskatoon by the end of March 2011.
There are currently 270 people at head office, along with 12 of 15 senior executives according to PotashCorp spokesperson Bill Johnson.
Doyle also committed to having 2,528 people employed at Saskatchewan potash mines by 2015.
Based on the numbers at the time the letter was written, it would be an increase of 600 people from February 2011. On Tuesday, PotashCorp cut 440 jobs in the province.
“We understand the strong and mutually beneficial role that our company plays in the province,” Doyle wrote his letter dated Feb. 11, 2011.
“We will always seek to do what is right for the people of Saskatchewan and the company’s stakeholders.”
With files from The Canadian Press
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