Energy industry layoffs in Calgary a boon for HR companies
Talisman Energy, ConocoPhillips and Nexen Energy, the latest companies to announce layoffs
Depending which human resources firm you talk to, they each have a different buzz word to describe the series of layoffs occurring in the glass office towers in downtown Calgary.
Some describe it as "downsizing" or "outplacement," while others prefer a more straightforward approach, calling it "employee termination."
No matter the term, it's exactly what HR firms are being called upon to do. Similar to the George Clooney movie Up in the Air, people who specialize in layoffs arrive at office towers to help break the news to employees.
For those specialists, business is booming.
Uncertainty over crude
Talisman Energy, Nexen Energy and ConocoPhillips are the latest companies to announce layoffs in response to plunging oil prices and uncertainty over whether crude could keep falling in value.
"I would say that piece of our business has increased probably 25 per cent. A day doesn't go by that we're talking about preparing a client for that or we get a call," says Wendy Giuffre, who is with the Calgary-based HR consulting firm Wendy Ellen Inc.
"It's not fun business, but right now it's definitely a piece of our business."
Since the downturn in the energy sector last year, the number of layoffs in the worldwide oil and gas industry is at least 75,000. Jobs have been lost at oilfield services companies, parts manufacturers and steel pipe makers, according to Forbes magazine.
'It's a little like Armageddon right now.- Jason Elvy, HR specialist
"It's a little like Armageddon right now," says Jason Elvy, of JAB recruiting in Calgary. "We're having multiple layoffs in the thousands from organizations and we're up to the third wave of large-scale layoffs."
ConocoPhillips is cutting seven per cent of its Canadian staff – about 200 jobs. Calgary employees and workers in the field will be affected.
Talisman announced this week it is slashing 10 to 15 per cent of its workforce, or about 150 to 200 employees at its Calgary head office. The company is in the process of being sold to Spanish energy giant Repsol, following a proposed $13-billion US deal.
Nexen will cut 400 positions, the majority at its Calgary office. Nexen was acquired by China's CNOOC Ltd. more than two years ago, and despite the layoffs, the company says it's fully compliant with commitments it made to the federal government when the controversial $15.1-billion deal was approved.
Meanwhile, Athabasca Oil says it has cut costs in all areas, including a reduction in head-office staff by about 50 per cent since the start of 2014.
Ripple effect in city
The layoffs are predominantly in the oil industry, but HR firms are noticing a ripple effect in the city.
"An interesting shift we are seeing is that a number of our new clients are outside the oil and gas industry, who realize the marketplace is a little bit tougher," says Jennifer Doiron, a career transition consultant with Cenera.
"We are seeing everything – finance, manufacturing, the service industry, not for profits."
Many of the people who specialize in the layoff process saw a similar spike in business during the 2009 recession.
"They know they can't wait, they have to get a handle on it, so they are acting fairly quickly," says Janet Salopek, a partner with Salopek Consulting. "They are certainly making decisions to say if there is anybody in the system that is not performing or adding value, it's a no brainer, we have to part ways."
HR firms brought in by companies during layoffs sometimes help write termination letters, prepare the announcement and assist workers on the day of their termination. They can also help employee prepare for another job or career.
Some oil companies are choosing to also consider cutting salaries, eliminating bonuses, and offering sabbaticals and shortened work weeks.