Suncor job cuts to total 1,000
By Shaun Polczer, Calgary Herald September 4, 2009
The Calgary-based oilsands giant said Thursday most of the cuts have happened following the $18.4-billion merger between Suncor and Petro-Canada that formally took effect Aug. 1.
Cuts will continue through retirement, layoffs and reduction of contract work, the company said. About 13,000 people were employed by the two integrated oil producers prior to the corporate union earlier this year.
Speaking in front of the newly dubbed Suncor Energy Centre in downtown Calgary, oilpatch engineer Jim Wu said the layoffs and current economy have many people concerned.
Although not directly affected by the cuts, as he is on contract with another oil and gas firm, Wu has friends who have been told their positions with Petro-Canada projects won't be renewed and are worried about competing with others for fewer jobs.
"It's devastating," Wu said of the layoffs.
Employees leaving the company's headquarters Thursday afternoon declined to comment.
Suncor said the largest numbers will be cut from corporate headquarters in departments such as finance, human resources and IT, as well as jobs in the conventional natural gas division.
"The majority of people have either been offered new jobs in the organization, confirmed in their existing jobs, or if they're leaving the organization, most of them know already," Suncor spokesman Brad Bellows told the Herald.
Some overlap in leadership positions in the refining and natural gas units have already resulted in cutting executive positions.
Chief executive Rick George said the company has already seen significant savings through reduced operating expenses.
"Unfortunately, bringing two large businesses together has also meant that some of the efficiencies are necessarily through workforce reductions," George said in a statement.
"It's been difficult but we've said from the start that this would be the case, and worked hard to keep employees informed and to move quickly to build the new organization."
The announcement comes as Calgary's unemployment rate has almost doubled in the past 18 months to 6.9 per cent. In July, Alberta's unemployment rate stood at 7.2 per cent, although it is the third-lowest in the country.
The price of oil dropped sharply from its high of$140 US a barrel last year, while demand for natural gas is off--leading to job cuts in sectors from the oilpatch to hospitality.
According to experts, people are concerned about finding new placements immediately, although experienced personnel in specialized positions continue to be in demand.
"The hiring climate is one of extreme caution," said Greg Pocherewny, vice-president of placement with headhunting firm Robert Half Canada. "There's still a demand for employees of all sorts but the overall hiring process certainly is taking longer than it did a year ago. Every prospective new hire is being scrutinized prior to offers going out."
Opportunities still exist but it will take more networking and research to land a job, Pocherewny added.
Oil and gas corporations, service companies and support firms all have been slicing jobs since late 2008.
The oilpatch layoffs echo the attrition seen in the early to mid-1990s when huge mergers such as the Amoco takeover of Dome Petroleum, and Trans-Canada Pipeline gobbling Nova Corp. put thousands of people on the job-hunting line.
Calgary already has absorbed the bulk of the current cuts, but the outlook is relatively bright for people who come from the very areas being reduced by Suncor, economist Adam Legge noted.
"With the unemployment rate being fairly low in those occupations, they stand a better chance of finding work subsequent to the layoffs," said Legge, with Calgary Economic Development. "Having said that, we're facing a recession, companies are in hiring-freeze mode, they don't have as many job openings across the economy in general, so it may take longer to find work."
Unionized labour in Suncor's oilsands operations and Petro-Canada's refineries have not been affected, said Jim Britton, with the Communications, Energy&Paperworkers Union of Canada.
"The last time I spoke with Suncor, I was told none of our members would be affected," Britton said from Vancouver.
Premier Ed Stelmach, in Calgary on Thursday, lamented the job losses but stressed he believes the merger is beneficial to the province.
"The jobs lost are significant and it's of great concern to us in government," he said.
"In the end, (the merger) will make for a much stronger company, one that will attract investment to Alberta. It will attract investment to the oilsands, not only to the extraction side but also to the value-added, and we will get those jobs back, plus many more."
© Copyright (c) The Calgary Herald