TORONTO/WINNIPEG, Manitoba – Cenovus Energy Inc CVE.TO plans to cut 20% to 25% of its workforce after it acquires Husky Energy Inc HSE.TO, the companies told Reuters on Tuesday, as Cenovus begins to slash costs in the Canadian oil patch’s biggest merger in four years.
Source: Reuters
The job losses could total about 2,150 positions, based on the size of their workforces, including contractors, with the majority to take place in Calgary, Alberta, Husky said in a statement.
Cenovus and Husky confirmed the job cuts after two sources told Reuters of the magnitude of the reductions.
Cenovus shares rose 6.7%, while Husky gained 6.5%, extending their gains after Reuters first reported the cuts.
Pandemic lockdowns have hammered fuel demand and added to woes for Canada’s beleaguered oil sands producers, who have struggled to recover after six years of downturn.
It was not clear when the Cenovus cuts would take effect.
“As with any merger of this type, there will be overlap and there will be some difficult decisions as we work to create a combined organization best positioned for the future,” Husky spokeswoman Kim Guttormson said.
Cenovus spokesman Reg Curren also confirmed the cuts.
Guttormson added that many details had yet to be determined as part of the integration planning process and the transaction has not yet closed.
The C$3.8 billion ($2.9 billion) combination announced on Sunday, the largest Canadian oil and gas deal in nearly four years based on enterprise value, may pressure peers to get bigger or sell.
Half of the C$1.2 billion in targeted savings will be achieved through job cuts and reductions in corporate overhead costs, including streamlined IT systems and procurement savings, the companies said.
Rival producer Suncor Energy Inc SU.TO this month said it would cut up to 15% of its workforce over the next year and a half, while Exxon Mobil Corp XOM.N was expected to cut jobs soon in the United States and Canada.
