Barrick Gold Corp. is making deep cuts to its Toronto head office even before its acquisition of Randgold Resources Ltd. has closed – and long-standing director Anthony Munk is stepping down from the board.
About 95 people, more than half of Barrick’s head-office staff, have already been given layoff notices, according to sources familiar with the matter who aren’t authorized to speak to media. Most of the staff have already departed and a minority will stay on until the end of February.
After the US$6-billion deal with Randgold was announced in September, Barrick employed about 150 people in its Toronto office. At the time, Barrick said its continuing decentralization push may result in “some work-force reduction” and any cuts were expected to be identified within 12 months of the deal closing.
But the pace of layoffs appears to be quicker than expected – at least at the head office.
The Toronto layoffs affect finance, capital allocation, communications and investor relations, sources said. Almost the entire digital team – about 15 people – has been cut, sources said, and the company will now only occupy one floor in its Toronto building, as opposed to two.
Mr. Munk, son of Barrick founder and former chairman Peter Munk, has tendered his resignation from the board. Anthony Munk has been on the board for 22 years. He is also senior managing director with Canadian private-equity firm Onex Corp. Mr. Munk felt the timing was right in light of the death of his father earlier in the year and the change in leadership at Barrick, said a source familar with the situation. Barrick is expected to announce Mr. Munk’s departure along with other changes to its board on Jan. 1 after the Randgold acquisition closes.
Barrick spokesperson Andy Lloyd declined comment on both Mr. Munk’s resignation and the job losses.
Barrick has spent the past few years slimming down – or as executive chairman John Thornton has said, trying to go “back to the future" – in an attempt to become more like the Barrick of old, when it was a much smaller, nimbler and more efficient operation. Barrick’s head office had already been trimmed significantly since peaking at about 500 employees six or seven years ago.
Randgold founder Mark Bristow, who is about to take over as Barrick’s chief executive, is known for running an extremely lean operation.
Barrick’s no-premium acquisition of Randgold is its biggest purchase in seven years and has been warmly greeted by shareholders on both sides as a sensible solution in a difficult market. Since the deal was announced, Barrick’s shares are up about 28 per cent.
Founded in 1983 by Hungarian-born serial entrepreneur Peter Munk, Barrick once had a market cap in excess of $54-billion. But its value plummeted after the price of gold bullion went into a tailspin in late 2011 and in the aftermath of a number of corporate blunders.
In 2011, Barrick paid $7.3-billion to acquire copper producer Equinox Minerals, but later wrote down its value by more than half after the price of copper plummeted.
Barrick shares closed Friday down 25 cents at $17.85 on the Toronto Stock Exchange – a market value of about $21.1-billion.