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Two-thirds of energy company employers cut labour costs due to COVID-19, survey shows

A survey by energy labour market organization PetroLMI shows that more than two-thirds of the employers in Canada's oil and gas sector imposed labour cost reduction measures in the wake of the COVID-19 pandemic lockdowns, including 37 per cent who enacted permanent layoffs.

Nearly 4 in 10 workers say their company implemented permanent layoffs

A flare stack lights the sky from the Imperial Oil refinery in Edmonton on Dec. 28, 2018. (Jason Franson/Canadian Press)

A survey by energy labour market organization PetroLMI shows that more than two-thirds of the employers in Canada's oil and gas sector imposed labour cost reduction measures in the wake of the COVID-19 pandemic lockdowns, including 37 per cent who enacted permanent layoffs.

The division of Energy Safety Canada surveyed 300 energy industry workers in August and September and interviewed 13 company leaders in September and August for its four-part report looking into industry reaction to lockdowns that slashed global oil demand, leading to rapidly falling oil prices.

"Due to the sudden economic impact resulting from the COVID-19 pandemic after five years of depressed oil prices, energy employers had to find ways to reduce operating costs," the report notes.

"While nearly four in 10 energy workers surveyed said their company implemented permanent layoffs, many companies were seeking alternatives to layoffs."

The survey found that 35 per cent of the companies invoked a hiring freeze, 29 per cent cut executive pay, 28 per cent trimmed worker pay, 27 per cent had temporary layoffs and 21 per cent restricted work hours.

Only 32 per cent did nothing to reduce labour costs.

Majority working from home

The survey found that only 13 per cent of energy workers worked from home at least one day per week before COVID-19, but that rose to 70 per cent in March, with 57 per cent working from home at least five days a week.

"Historically, the oil and gas industry has not typically been known for its flexible work policies, particularly the ability to work from home," said PetroLMI analyst Lisette Cameron during a webinar on Friday.

"So it's not a huge surprise when we asked energy workers how often they worked from home prior to the pandemic, about seven in 10 said they never work from home and only eight per cent said they work from home five or more days per week."

At the time of the survey in August and September, 47 per cent were still working from home at least one day per week and 31 per cent were working from home five or more days per week.

On its website, PetroLMI notes that oil and gas employment increased by 4,450 jobs in October to 164,590 compared with September, but was down 12 per cent or 21,400 jobs from October 2019.

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