David Aplin Group President, Jeff Aplin, reports to the Calgary Herald on the logistical challenges that carrying out large-scale layoffs create even for the biggest companies.
There’s no good way to lose your job, but there are certainly bad ways. As the stories of mass dismissals in the oil and gas sector circulate with each round of announced layoffs, complaints are emerging of staff being told to be in their offices at 8 a.m. sharp with the door closed. They can then wait a couple of hours for “the knock.” That time in employment purgatory lasts until human resources staff have completed their sombre rounds.
So much for downsizing with dignity.
Devon Canada revealed Wednesday it was cutting 200 people, about 15 per cent of staff, as it wrapped up a major oilsands project while MEG Energy said it has laid off about 240 people, about 30 per cent of staff, due to the challenging operating environment. Enerplus Resources laid off 70 people, or 10 per cent of employees, on Monday due to low oil and gas prices. The spouse of a now former Devon employee complained to the Herald about the layoff procedure even before the staff cut was made public and there are similar stories across the oilpatch these days. The Canadian Association of Petroleum Producers has said there have been more than 35,000 layoffs in the upstream industry this year.
“Each employee either got a visit from a third-party HR firm to handle the termination or from their manager if they were being retained,” said an e-mail from the spouse who contacted the Herald’s Dan Healing about the Devon layoffs on the condition of anonymity. “Terminated employees were given until noon to pack their offices.” Royal Dutch Shell, Suncor Energy, Husky Energy, TransCanada, Penn West Petroleum, Pengrowth Energy and ConocoPhillips are all among the growing list of companies that have made significant staff cuts in Canada since oil prices plunged by more than 50 per cent since June 2014 with the glut in global supplies and waning demand.
The price collapse has reportedly led to more than 200,000 oil and gas jobs lost worldwide; mostly in oilfield services. Even if employers strive to be empathetic and compassionate with staff reductions, carrying out a large-scale layoff creates logistical challenges for even the biggest companies. “When you get to a large number it’s extremely difficult because you’re either dragging it out over days and weeks, or you’re doing something you wouldn’t normally do,” said Jeff Aplin, president of Calgary-based David Aplin Group Recruiting Solutions. “I’m not sure there’s exactly a right or wrong way to do a mass cut like that.”
In August, Australian company Hutchinson Ports was harshly criticized for being cruel and insensitive when it dismissed 97 workers through text and e-mail. When Cenovus Energy laid off 540 employees in September it had to apologize after word leaked to media that a number of employees waiting to learn if they had lost their job had some access to computer systems prematurely shut down. The company expressed regret for causing “additional stress for people on an already stressful day.” Aplin acknowledged it creates legitimate business challenges for companies to operate with compassion and dignity “while delivering tough news about the reality of the business.”
Those challenges don't appear to be going away soon.
Calgary investment bank Peters & Co. recently reported the staff reductions are starting to generate cost savings that are showing up in financial result and more layoffs can be expected if West Texas Intermediate crude remains below US$50 per barrel and oilsands producers struggling to generate positive cash flow. “We believe that further head count reductions will need to be undertaken — particularly if growth projects continue to be deferred,” Peters said.
Shell announced Tuesday it was scrapping the 80,000-barrel-per-day Carmon Creek oilsands project in northwestern Alberta will take a $2 billion charge against earnings for cancelling a project first announced in October 2013. A report Wednesday from the Conference Board of Canada said oil and gas producers will record a $2.1 billion pre-tax loss in 2015 as depressed commodity prices significantly impact revenues and spending.
With workers on pins and needles as they contemplate their job security — or their future employment prospects — Aplin reiterated the mantra that the oil and gas industry is cyclical and made the point even if the layoff process feels abrupt or impersonal it’s likely not a reflection of the person’s performance in their job. “It’s not personal, the numbers we’ve seen in terms of layoffs are in the tens of thousands,” he said. “It’s just the reality of the business.”
Original SOURCE ARTICLE: Calgary Herald
Stephen Ewart is a Calgary Herald columnist
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