'Unpaid sabbaticals' to wage cuts: How oilpatch companies are avoiding layoffs

CALGARY -- Companies in the ailing oilpatch are looking at ways to avoid layoffs -- or at the very least to delay or minimize them.

See Full Article

Canadian Natural Resources Ltd. (TSX:CNQ) has not had to trim its workforce of more than 7,600 as a result of the crude price collapse.

"In lieu of layoffs, we went to our staff and said 'we will do wage reductions.' And every employee who made more than $50,000 had a wage reduction," chairman Murray Edwards said to applause at a recent business forum in Lake Louise, Alta.

"The majority of employees said they would rather ... keep the team together than to have people laid off."

The Canadian Association of Petroleum Producers has estimated at least 40,000 jobs have been shed in Canada's oil and gas industry this year, with the bulk in Alberta.

With oil prices hovering below US$50 a barrel for much of this year -- and dropping below US$40 in recent days -- it's been tough for oil producers to justify investing in new projects.

About 1,500 job losses have been announced at oilsands giant Cenovus Energy (TSX:CVE) this year. But in addition to that, the company has taken a hard look at benefits and discretionary spending, said CEO Brian Ferguson.

"We did put in a salary freeze in 2015 as did, I think, most of industry. We have reassessed all of our time off practices."

Debby Carreau, CEO of human resources consulting firm Inspired HR, encourages employers to look at all options before they resort to letting staff go.

That could include reducing or delaying contributions to Registered Retirement Savings Plans, suspending health spending accounts, freezing salaries or slashing bonuses.

Some companies that have cut salaries are rewarding employees with stock. Others have instituted shortened work weeks or given employees "unpaid sabbaticals" until things look up.

And some have encouraged employees to go back to school or brush up on their training, with a promise that they'll have a job to return to.

Instead of catered lunches in the office every day, maybe it's sandwiches from Subway once every two weeks now, said Carreau.

"Those peripheral fringe benefits can actually add up, especially in Calgary where we've had such lucrative compensation plans," she said.

"Some of those things that people don't automatically look at can actually save on costs and send the right message to the organization -- that you care, but you're doing everything you can to keep the jobs."

Integra Partners Ltd., a company with fewer than 30 employees that helps oil and gas companies manage their documents, has done everything possible to avoid layoffs, said partner Chris Blender.

Blender and the firm's other partners have taken a pay cut. Integra also found a new benefits provider that offers the same services as the old one, but at a lower cost.

"Because we're in the service industry, people are our business and we spend a lot of time to attract and train our people," he said. "The last thing we want to do is let anybody go during this time."



Advertisements

Latest Economic News

  • Aeroplan wants to be your rewards program and travel agent. Will it work?

    Economic CBC News
    Aeroplan wants to be more than your rewards program; it also aims to serve as your travel agent. The program announced its ambitious plans this week, which include offering charter flights to sun destinations, opportunities to book travel with cash while earning points, and the ability to transfer miles to other loyalty programs. Source
  • Higher crude prices and weaker loonie could offer provinces royalty windfall

    Economic CBC News
    Resurgent oil prices this year could deliver three provinces unexpected windfalls — and maybe improved political fortunes — if crude stays strong. Sagging prices have weighed heavily on resource-based economies in recent years, putting the squeeze on provincial budgets that rely on petroleum revenues. Source
  • Canadian agriculture ministers briefed on trade-war contingency plan

    Economic CTV News
    VANCOUVER -- Federal Agriculture Minister Lawrence MacAulay emphasized the importance of the provinces working together as an escalating trade war with the United States puts some farmers on edge. The minister said his provincial and territorial counterparts discussed trade negotiations and the contingency plan during their conference that wrapped up Friday in Vancouver. Source
  • Teamsters members at CP Rail ratify new contract

    Economic CBC News
    Unionized conductors and locomotive engineers at Canadian Pacific Railway Ltd. have voted in favour of a new four-year collective agreement. Members of the Teamsters Canada Rail Conference (TCRC), which represents about 3,000 workers at CP, voted 64.7 per cent to ratify the new contract. Source
  • Pipeline protesters say they're willing to defy eviction notice

    Economic CTV News
    BURNABY, B.C. - Protesters at an anti-pipeline camp in Burnaby, B.C., say they are ready to defy an eviction notice handed out from the city. The City of Burnaby issued a 72-hour notice to those occupying "Camp Cloud" on Wednesday, but protesters say in a news release that isn't enough time to comply with concerns raised over safety. Source
  • Japan resumes Canadian wheat imports after suspension

    Economic CBC News
    Ottawa says Japan has ended its temporary suspension of Canadian wheat imports. Japan had halted shipments after some unauthorized genetically modified wheat was found in southern Alberta. Ottawa says the decision marks an end to all international trade actions arising from the discovery on June 14. Source
  • Ottawa says Japan has resumed Canadian wheat imports after temporary suspension

    Economic CTV News
    Ottawa says Japan has ended its temporary suspension of Canadian wheat imports. Japan had halted shipments after some unauthorized genetically modified wheat was found in southern Alberta. Ottawa says the decision marks an end to all international trade actions arising from the discovery on June 14. Source
  • 'This is madness': Auto industry warns U.S. lawmakers of dire tariff consequences

    Economic CBC News
    The world's automotive industry gathered in Washington with uncharacteristic unity, to deliver a singular message to American policymakers: If you start a trade war with tariffs on cars, you'll shoot yourself in the foot. The issue that has been gaining steam for weeks came to a head Thursday as dozens of representatives from the industry around the world deliver their remarks at a hearing before the U.S. Source
  • Loonie moves up as inflation ticks higher, TSX ends lower along with U.S. markets

    Economic CTV News
    Stock indexes in Canada and the U.S. closed down Friday on geopolitical tensions, while the loonie surged higher after Statistics Canada said the inflation rate jumped in June. Data from June showed the country's annual inflation rate rose to 2.5 per cent for the month, up from a 2.2 per cent reading in May to hit its highest mark in more than six years. Source
  • Loonie moves up as inflation ticks higher, TSX moves lower at late-morning

    Economic CTV News
    TORONTO - The loonie surged higher after Statistics Canada reported the annual inflation rate in June hit its highest mark in more than six years, while Canada's main stock index lost ground. The Canadian dollar was trading at 76.16 cents US, up from an average value of 75.44 cents US on Thursday. Source