Suncor Energy Inc. SU-T will cut 1,500 jobs by the end of the year, as new chief executive Rich Kruger forges ahead with his mandate to reduce costs and improve the company’s lagging financial performance.
Employees were given the news Thursday afternoon, in a companywide email from Kruger, Suncor spokesperson Sneh Seetal said.
She confirmed the job reductions are new, and not part of the company’s previously announced plan to reduce the size of its contractor work force by 20 per cent in an effort to improve safety and performance at its oil sands sites.
“As a company, we needed to make changes that will strengthen our company for the future, and that includes our overall cost structure,” Ms. Seetal said by phone, adding the 1,500 job losses will be spread across the organization and will affect both employees and contractors.
The reductions amount to about 9 per cent of the 16,558 employees that Calgary-based Suncor had at the end of 2022, according to the company’s annual information form. However, that tally does not include contractors.
Suncor has been under pressure from shareholders – including activist investor Elliott Investment Management – to improve its financial and share price performance, which has lagged its peers.
The company has also been under fire for a recent spate of operational issues and workplace safety incidents, including a string of deaths.
Earlier this spring, Mr. Kruger, the former CEO of Imperial Oil Ltd., was enticed out of retirement to take the reins of Suncor and try to turn around the oil sands giant.
In an interview with The Canadian Press last month, Mr. Kruger declined to say whether that would involve layoffs or not. But he said he would “look hard and long at the work people do” to ensure that everything that is being done at the company adds value to the bottom line.
Ms. Seetal declined to say whether the bulk of the layoffs would take place at head office or in the field. Suncor employs people across the country, in the U.S. and internationally, with its corporate head office located in Calgary.
But she echoed Mr. Kruger’s theme of needing to ensure people are doing the work that provides the most value to the organization.
“Work that doesn’t necessarily support regular day-to-day maintenance and operations of assets would be considered [for layoffs], but it’s not necessarily solely office workers,” she said.
Ms. Seetal said Suncor is committed to treating its employees with dignity and respect throughout what will inevitably be a difficult process.
She also emphasized the company will not make any cuts that could affect worker safety.
In the first quarter of 2023, Suncor earned a $2.05-billion profit. On an adjusted basis, Suncor’s reported first-quarter profit was $1.81 billion, a 34-per-cent decrease year-over-year.