ConocoPhillips, Penn West cut over 900 oil and gas jobs
WATCH ABOVE: The latest oil industry cuts were announced from ConocoPhillips and Penn West Petroleum where almost 900 employees were laid off. Global’s Gary Bobrovitz reports.
CALGARY – A fresh wave of layoffs is hitting the energy sector as two oil and gas companies cut a total of 900 jobs, mostly in Calgary.
Penn West Petroleum is cutting its workforce by 35 per cent for a loss of over 400 full-time employees and contractors.
And ConocoPhillips Canada plans to lay off 400 employees and 100 contractors, for a 15 per cent workforce reduction.
In light of the recent wave of layoffs, the founder of the Calgary Career Counselling centre said she’s seen a 20 per cent increase in clients compared with a “normal” summer.
Dr. Laura Hambley suggests people who lose their job take time to look at their “life situation” and what they want to be doing in the future.
“It’s the time to pause…get out there with a plan and a strategy,” she told Global News Tuesday. “It’s better to send two well thought-out resumes than 200 that aren’t.”
Hambley stressed the importance of networking, saying you should spend equal amounts of time investing in both face-to-face and social media interactions. She said it’s important to tap the “unposted” as well as the posted job market, by connecting with friends, past colleagues and neighbours, as well as those on platforms like LinkedIn.
“Just as important as what you put on social media is what you don’t put on social media,” she said.
Penn West (TSX:PWT) says most of the job cuts it announced Tuesday are effective immediately, while ConocoPhillips told its employees on Monday that its workforce reduction will happen by mid-October.
The companies say they are responding to the recent decline in oil prices that looks to be prolonged.
North American crude has been trading below US$50 a barrel in recent weeks compared to over US$100 a barrel last summer.
Penn West cuts
Penn West is also suspending dividend payments to its shareholders after its next payment in October and reducing compensation for its board of directors.
It has also identified a further $75 million of capital spending that will be put off, reducing this year’s capital budget to $500 million — a 40 per cent reduction from its original plan to spend $840 million in 2015.
For next year, Penn West will aim to keep its capital spending within cash flow generated from operations, with a focus on its light oil properties in the Viking and Cardium shale formations in Western Canada.
The company has scheduled a morning conference to brief analysts, starting at 8 a.m. MT (10 a.m. ET).
“We have made a number of exceptionally difficult decisions in order to remain competitive in the current commodity price environment,” Penn West chief executive and president Dave Roberts said in a statement,
“We view the cost reductions as sustainable and we will remain well positioned for the potential expansion of development activities and capital programs in the future.”
Penn West estimates that the workforce reduction will reduce spending about $45 million a year. The suspension of its dividend after the previously announced payment of one cent per share on Oct. 15 will reduce annual cash outlays by $20 million.
Payments to non-management directors on Penn West’s board will be cut 40 per cent and the payment to Penn West chairman Rick George will be cut by 50 per cent.
With files from Global News