CALGARY - Talisman Energy Inc. (TSX:TLM) has laid off 90 employees at its Calgary office as low North American natural gas prices force it to cut spending on less profitable areas.
The Calgary-based international oil and gas producer says the job cuts are part of an effort to reorganize and streamline its Canadian operations.
"These are difficult decisions, and we appreciate the contributions our colleagues have made," John Rossall, Talisman's senior vice-president for Canada, said Wednesday.
The company says persistently weak natural gas prices have caused it to direct focus away from dry gas areas and focus more on ones rich in liquids, which fetch a price more akin to oil.
Talisman still has 1,500 employees in Canada, with 1,200 of those in Calgary.
It has been working to reduce costs and better focus its operations since Hal Kvisle became chief executive officer in September.
The company has said it aims to reduce its general and administrative expenses, which are currently at $1.3 billion, by 20 per cent annually.
"Today is the first significant announcement and we will continue to take steps to restructure and right-size the company," said Talisman spokeswoman Phoeble Buckland, declining to speculate on how many more jobs may be cut.
The layoffs include professionals such as engineers and geologists in Talisman's Canadian division, as well as administrative staff that supported that work, Buckland said.
In a recent interview, Kvisle said the cost reductions would take place gradually throughout the year.
"There will not be a big, dark day when all of this stuff occurs in a single shot," he said.
Talisman is exiting high-risk exploration areas such as Sierra Leone, Poland and Peru, which should make a big dent in costs.
The company has an attrition rate of more than 10 per cent, so some vacant positions won't be filled. The company also aims to reduce travel and office rental expenses.
Talisman shares dropped a penny to $12.69 in Wednesday afternoon trading on the Toronto Stock Exchange.