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

Suncor Energy informed employees on Friday morning that it's cutting staff by as much as 15 per cent in the coming months.

Jobs cuts come wake of global pandemic, economic slowdown and slumping oil prices

Suncor Energy informed employees Friday that the Calgary-based company will be cutting staff by as much as 15 per cent in the coming months. (David Bell/CBC)

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 internal webcast on Friday morning. The first tranche of layoffs, about five per cent of the workforce, will come in the next six months.

Spokesperson Sneh Seetal said the 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 the timetable. 

"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 indirect jobs have been lost in the sector in 2020.

Due to the industry's wide supply chain, those job 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 said it's planning to cut between 7,000 and 9,000 jobs worldwide by the end of 2022. But the implications for Shell's Canadian operations or its 3,500 employees isn't yet known.

Suncor's cuts appear to be part of the drive for efficiency that can be seen in the 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's layoff 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 lead to 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."

Kenney said the 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 Notley took aim Friday at the Kenney government's decision to cut corporate taxes for companies like Suncor, pointing a finger at 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."