Calgary-based Enbridge Inc said on Wednesday it would cut about 1,000 positions, or 6 percent of its work force, after buying Spectra Energy Corp of Houston, the first layoffs since the deal.
The takeover announced last year, the most significant energy deal since oil and natural gas prices crashed in mid-2014, had highlighted how pipeline companies were under pressure to merge as they grappled with overcapacity and sliding tariffs that had slowed dividend growth and unnerved investors.
It is relatively common for layoffs to occur in mergers. At the time, an expert said the deal had no serious antitrust problems as the companies’ networks have limited overlap.
But duplications exist in the combined company’s “organizational structure,” Enbridge spokesman Todd Nogier said.
“After a careful evaluation, Enbridge has taken the difficult but necessary step to address the overlap.”
Nogier said the workforce reductions are a component of the “synergies” expected over the coming months as it fully integrates the companies. The company declined to disclose details on the positions that will be cut.
BELOW: Read Enbridge spokeperson Todd Nogier’s complete statement
After a careful evaluation, Enbridge has taken the difficult but necessary step to address the overlap in the combined company’s organizational structure. Unfortunately, this means a reduction of approximately 1,000 positions, or about 6 per cent of our workforce.
These workforce reductions are only one component of the synergies we expect to achieve over the coming months as we fully integrate our companies.
Throughout this process, Enbridge is committed to treating people fairly and with respect. We are providing support to those leaving the company, as well as those who remain.”