Energy companies issued pink slips in the tens of thousands during the two-year collapse in crude prices and, a new study shows, some firms plan further reductions.
Ernst and Young and the University of Calgary’s Haskayne School of Business conducted a survey of 72 Canadian oil and gas companies and asked, given all the staff cuts that have been made over the past couple of years, whether executives are considering further changes to their organizations.
One Ernst and Young spokesman said that companies reacted with layoffs to survive when crude oil prices began to fall in the second half of 2014 but are now considering what he calls "different ways that you can do work – better, faster, cheaper – with less people involved."
The study released last week reflects a widespread expectation in the oilpatch that the oil price recovery is likely to be a jobless one, where companies – spooked by continued commodity price volatility – continue to focus on cutting costs.
It showed that 80% of Canadian oil and gas companies had reduced their headcount over the last two years – and 9% of the respondent companies, particularly in oilfield services and upstream exploration, cut more than 50% of their staff.
The result was 30,000 direct job losses in Alberta alone, according to federal government data.
The study showed companies that took a longer-term approach to the oil price collapse – by reducing salaries and re-assigning employees rather than just staff cuts – tended to be most satisfied with their reorganizations.
Roughly half the respondent companies cut their rosters between 10%-35% during the downturn and 81% of those companies said their cost-cutting efforts had above-average success rates.
