Canada Stockwatch – Canadian oil and gas exploration and production company Talisman Energy Inc. (TSE:TLM, Mkt cap 10.22B, P/E – , Div/yield 0.08/3.16, EPS -1.15, Shares 1.03B) has admitted vulnerability to the low commodity prices in the industry, announcing that hundreds of its employees would be laid off this week.
As the Financial Post reports, Talisman was not the only Calgary-based energy firm to announce a jobs cut, with Nexen Energy ULC also reporting it has been forced to axe a significant proportion of its Canadian headcount.
Talisman, whose shareholders approved an $8.3 billion acquisition offer from Repsol SA this year, said 10% to 15% of its employees and contractors would be axed this week, or about 150 to 200 of 1,300 Calgary head-office jobs that support its global operations.
Nexen, a subsidiary of China’s CNOOC Ltd., said it will be cutting 400 jobs – 300 which of will be in Calgary, with the losses representing 14.5% of the company’s total Canadian employees.
Fang Zhi, CEO at Nexen, offered some insight into why a number of energy firms have deemed job cuts necessary, stressing that “long-term viability and sustainability” is what led its decision.
“While regrettable, these organizational changes are necessary to align the company with our reduced capital spending program,” he said.
“We take these decisions seriously, and all impacted employees have been treated fairly and with respect.”
Oil prices have tumbled by more than 50% since June and have recently resumed their descent, with layoffs at some of the major energy sector players becoming something of a common occurrence.
Shannon Bowen-Smed, CEO of Bowen Workforce Solutions, a Calgary-based recruitment and placement firm, told the FP “with absolute certainty” that there will be more “fairly sizable” job cuts in the next couple of days as the sector tries to regain a more stable footing amid the falling oil prices.
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