Suncor Energy will cut 10% to 15% of its workforce over next 18 months
Cuts are to be made across the entire organization; will also affect Suncor's contracted workers.
CALGARY — Oil sands and retail fuel giant Suncor Energy Inc. says it will eliminate as many as 1,930 jobs over the next 18 months as a result of cost-cutting to deal with low oil prices and market volatility.
CEO Mark Little told employees on a conference call Oct. 5 the company will aim to reduce total staff by 10 to 15% over the next 18 months, starting with a 5% cut over the next six months, spokeswoman Sneh Seetal said.
The Calgary-based company had 12,889 staff at the end of 2019; 5% would equate to 644 positions and 15% would equal 1,933.
“A few years ago we began to fundamentally change how we work, taking advantage of improved data technology, business processes, all with a view to improve our overall cost structure, accelerate free cash flow and strengthen our competitive position,” said Seetal, referring to what was dubbed the “Suncor 4.0” program.
“We always anticipated this transformation would result in a smaller workforce over time and one example … is the implementation of the autonomous haul trucks (driverless trucks employed at Suncor’s oilsands mines).
“That said, the unprecedented drop in oil prices, the continued impact of the global pandemic and economic slowdown, as well as continued market volatility, have accelerated those plans.”
The cuts are to be made across the entire organization, Seetal said, and will also affect Suncor’s ranks of contracted workers, although she was unable to provide those numbers.
Employees will be offered voluntary severance, early retirement and may potentially be redeployed if their jobs are eliminated, she said.
“What’s happening in Alberta today is nothing less than an economic emergency,” said Alberta Premier Jason Kenney at a news conference on Oct. 2.
“The government of Canada would be moving heaven and earth if we saw layoffs of this scale in the central Canadian manufacturing industry.”
He called on Ottawa to “hit the pause button” on implementing a clean fuel standard opposed by many in the oil sector, as well as delaying ratifying the UN declaration on the rights of Indigenous people because of its potential creation of uncertainty for oilpatch investors.
“It is unfortunate to hear of additional job losses in the industry. The reality of the current situation is grim and taking a toll on the industry and on Canadians,” said Tim McMillan, CEO of the Canadian Association of Petroleum Producers.
CAPP, which estimates more than 28,000 direct and 107,000 indirect jobs have been lost in the sector so far this year, says the federal government should implement a plan for national economic recovery that includes taking advantage of an expected recovery in global oil and gas demand.
The news comes a few days after Royal Dutch Shell announced it would eliminate between 7,000 and 9,000 jobs worldwide by the end of 2022, a move expected to potentially result in hundreds of job losses among its 3,500 workers in Canada.
In June, BP, which has a smaller workforce in Canada, said it was cutting around 10,000 jobs from its global workforce to cope with the impact of the pandemic.
Suncor put projects on hold and cut its 2020 capital budget by $1.5 billion to a range between $3.9 billion and $4.5 billion in March to deal with lower oil prices.
At the time, a spokeswoman said the cutbacks would result in fewer jobs for contract workers and could “potentially” hit employees as well.
Suncor’s operations include oilsands development and upgrading, offshore oil and gas production, petroleum refining and retail fuel sales under the Petro-Canada banner.
Suncor shares rose on the Toronto Stock Exchange by as much as 2.6% to $15.91 on Oct. 2 but remained at about one-third of their 52-week high of $45.12.
With a file from Bob Weber in Edmonton.