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Oil and Gas Discussion BB
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Recession reality hits Calgary: 900 oil jobs lostA major dose of bad news for Canada with these new layoffs, not to mention the families that needed these jobs just to stay afloat. I really feel bad for those that have lost their employment because many will likely not recover. Worse, there doesn't seem to be any plan or direction coming from anywhere... just jaws dropping as oil falls close to 10 % today. Sadly this is probably not over yet... Recession reality hits Calgary: 900 oil jobs lostCALGARY -- Within 24 hours of Alberta’s government confirming the provincial economy is shrinking, corporate Calgary’s workforce shrunk by nearly 1,000 jobs. Penn West Petroleum and the Canadian unit of ConocoPhillips confirmed on Tuesday that roughly 900 mostly Calgary-based positions between the two companies will be eliminated. As oil producers struggle to find more ways to reduce spending and the latest data from Statistics Canada confirms the national economy is in the midst of a technical recession, the reality of that economic decline is hitting Canada’s oil capital the hardest. The first cuts to be publicly disclosed came early Tuesday morning from Penn West. In addition to cutting spending and director compensation, cashing in foreign exchange contracts and halting all future dividend payouts, the company announced 400 employees would be losing their livelihoods at the company. Most of the layoffs, representing 35% of the total Penn West workforce, are of Calgary-based staff and are effective immediately. Dave Roberts, Penn West’s CEO, said in a statement the decisions were “exceptionally difficult” to make but will help the company “remain competitive in the current commodity price environment.” The company expects to save roughly $215-million as a result of the layoffs and other initiatives. ConocoPhillips also cut roughly 15% of its Canadian workforce this week. As was first reported by BNN midday Tuesday, the company confirmed that roughly 400 employees and 100 contractors mostly based in Calgary will be let go by mid-October. Employees learned of the impending layoffs on Monday; but Rob Evans, a spokesperson for the company’s Canadian unit, said staff were told earlier this year to expect headcount reductions before the end of 2015 as a result of the global oil producer’s plan to cut roughly 10% of its worldwide workforce. “It’s tough for people,” Evans told BNN via email. “But I think there is some relief now that they have a better sense on the scope and timing of the reductions.” Analysts have been warning of another round of layoffs for months if oil prices did not improve by the end of the summer breakup period, when the ground in Western Canada gets too soft for heavy oil and gas production equipment to be moved from one well site to another. The vast majority of commodity experts now believe lower oil prices are here to stay until at least the end of the decade, suggesting there are likely more layoffs still to come in corporate Calgary. Chevron’s Canadian unit was rumoured to be planning another round of layoffs this week beyond the 130 positions it eliminated in July. However, those cuts - representing 20% of the California-based oil giant’s Canadian workforce - are the only ones the company is currently planning, a spokesperson confirmed via email. Korean-owned Harvest Operations Corp. was also rumoured to have just announced its own Canadian headcount reductions this week, though the company did not immediately respond to a request for confirmation. Penn West held a conference call Tuesday morning to provide more details on its cutbacks. Usually analysts say a quick “thanks” after they receive an answer to their questions, but the final analyst to ask a question on the call instead provided this chilling sign of the times: “Well, good luck to all of us!” Jameson Berkow is BNN’s Western Bureau Chief. Follow him on Twitter @crudereporter. |
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Msg # | Subject | Author | Recs | Date Posted |
33625 | Re: Recession reality hits Calgary: 900 oil jobs lost | go blue | 4 | 9/1/2015 6:04:03 PM |