Suncor Energy to cut staff by up to 15% over next year and a half

Suncor Energy announced Friday it will be cutting staff by as much as 15 per cent over the next year and a half as the company deals with the impact of a slumping economy brought on by the global pandemic.

Staff learned of the cuts from the company's CEO, Mark Little, via an internalwebcast on Friday morning. The first tranche of layoffs, about five per cent of the workforce, will come in the next six months.

SpokespersonSneh Seetalsaidthe company was already undergoing a process to improve its cost structure that would have resulted in a smaller workforce over time,but current events have changed thetimetable.

"Unfortunately, the unprecedented drop in oil prices, the continued impact of the global pandemic, an economic slowdown as well as continued market volatility have accelerated those plans," she said.

"And as a result, over the next 12 to 18 months, we will reduce the size of our workforce by about 10 to 15 per cent."

Seetal was unable to say how many people those cuts would affect, but noted that at the end of 2019, the Calgary-based company had 13,000 employees. Suncor employs people across the country, in the United States and internationally.Seetal said everything is under review.

"We are looking at all operations, all of our assets, all of our offices across our workforce, with the exception of not making any decisions that would potentially impact safe and reliable running of our assets," she said.

According to the Canadian Association of Petroleum Producers (CAPP),more than 28,000 direct and 107,000 indirectjobs have been lost in the sector in 2020.

Due to the industry's wide supply chain,thosejob losses have impacted every region of the country, the association said.

"The reality of the current situation is grim and taking a toll on the industry and on Canadians," CAPP's chief executive, Tim McMillan,said in a statement.

Earlier this week, Royal Dutch Shell saidit's planning to cut between 7,000 and 9,000 jobs worldwide by the end of 2022. Butthe implications for Shell's Canadian operations or its 3,500 employees isn'tyet known.

Suncor's cuts appear to be part of thedrive forefficiency thatcan be seeninthe sector now, said Rory Johnston,managing director and market economist at Price Street in Toronto.

The reality of the current situation is grim and taking a toll on the industry and on Canadians.- Tim McMillan, CAPP chief executive

"The drive now is going to be to increase efficiency and increase the amount of value they can extract from each barrel of their core production base," Johnston said.

"You might get a little bit of production growth, but I think the days of heavy growth are mostly behind us."

Unfortunately, he said, that also means fewer jobs.

"I truly hope not, but I would not be surprised if we see some of the other Canadian majors follow suit," Johnston added.

Alberta Premier Jason Kenney called news of Suncor'slayoff plans "very disturbing."

"This announcement today by Suncor underscores that what's happening in Alberta today is nothing less than an economic emergency," Kenney said.

He said Alberta is facing the largest economic crisis since the Great Depression due to a global economic contraction that's leadto the "largest decline in energy prices in history."

"On top of five tough years, it is hard to overstate the economic adversity that so many Albertans are going through," said Kenney, who called on Ottawa to work with the province to get the industry"back on its feet."

Kenneysaidthe federal government should"hit the pause button" on the clean fuel standard, which he argues will make Canada's energy sector uncompetitive globally.

"As today's announcement underscores, this truly is a jobs crisis and an economic emergency, and it deserves to be responded to here in Alberta in the same way that it would be in Ontario or Quebec," he said.

However, Alberta NDP Leader Rachel Notleytook aim Friday at the Kenney government'sdecision to cut corporate taxes for companies like Suncor, pointing a fingerat the job losses that have since followed.

"Jason Kenney made a bad deal," Notley said in a statement.

"Instead of shoveling money off the back of a truck to finance corporate layoffs, the premier and his UCP need to build a plan to guarantee job creation and job protection."