BUSINESS

Oilsands Giants Cut Jobs, Slash Spending Again

07/30/2015 08:39 EDT | Updated 07/30/2016 05:59 EDT
Bloomberg via Getty Images
A Cenovus Energy Inc. logo is displayed on an employee's uniform at Christina Lake, a situ oil production facility half owned by Cenovus Energy Inc. and ConocoPhillips, in Conklin, Alberta, Canada, on Thursday, Aug. 15, 2013. Cenovus Energy Inc. is Canada's fourth-largest oil producer. Photographer: Brent Lewin/Bloomberg via Getty Images

Two major oilsands players have announced major spending cuts as they reported disappointing earnings.

Cenovus Energy Inc.said it's looking to cut between 300 to 400 jobs in the second half of this year, on top of 800 layoffs announced in February.

It's chopping its quarterly dividend by 40 per cent. The energy company says it will now pay a quarterly dividend of 16 cents per share, down from its earlier rate of 26.62 cents.

The cuts come as Cenovus reported a second-quarter profit of $126 million or 15 cents per share, down from $615 million or 81 cents per share a year ago. Revenue, net of royalties, fell to $3.73 billion, down from $5.42 billion.

A rebound in crude prices to around the US$60 a barrel mark in May and June proved to be short lived. U.S. benchmark crude prices have been below US$50 a barrel in recent weeks, about half of what it fetched a year earlier.

In addition to the head office jobs, the oil producer is also looking to trim its workforce in the field in early 2016. The reduction is expected to save Cenovus about $100 million annually, on top of the $280 million in cost savings it is already targeting for this year.

That follows Suncor's announcement Wednesday that it plans to slash spending for the year to a range of $5.8 billion to $6.4 billion, from an earlier range of $6.2 billion to $6.8 billion, Bloomberg reports.

Suncor didn't specify any new layoffs. The company had earlier announced 1,000 job cuts.

But even with reduced spending and staffing, Suncor is producing more oil. Production in the most recent quarter rose to 438,000 barrels a day from 378,000 barrels a year earlier.

The company's profit nearly tripled during the period, to $729 million, Bloomberg reports, but that was largely due to sales of assets and a reassessment of the company's debt.

— The Huffington Post Canada, with files from The Canadian Press

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