CALGARY — When Jeff Forsyth was laid off by Cenovus Energy during a company-wide downsizing last fall, he had an advantage over the hundreds of fellow employees who also found themselves out of work.
His experience with a successful oilfield technology startup, along with expertise in chemistry and project management he honed at Cenovus, helped him land a new job as CEO of nFluids Inc., a five-person research firm developing new industrial products based on nanoparticle technology.
"Essentially, I've been on that bridge between R&D (research and development) and product development/commercialization for quite a while, so I'm very familiar with both sides of the coin," said Forsyth, 49.
A rare success
Forsyth's story is one of rare success. While it may seem logical that the thousands of Albertans who have lost jobs over the past two years would simply find work in the thriving high-tech sector, that's not the case. Though often well-educated as engineers and geologists, their skills don't match what is needed, observers say.
Investor David Edmonds, who has been working with technology start-ups in Calgary for about 30 years, helped create nFluids and has been raising money to commercialize it. The company has signed a licensing agreement with an international chemical manufacturer to market its first product, an enhanced drilling fluid additive, but it is also looking at applications ranging from pharmaceuticals to cement and lubricants, said Edmonds, 61.
"I'd been searching for a CEO to replace myself for about 18 months," he said.
"Because of the downturn, I got probably one of the top guys in Alberta to now run that company. Three years ago, there wouldn't have been a hope that I could have got Jeff."
Developers and programmers needed
Edmonds said the province's biggest technology labour need now is software developers and programmers, and the oil industry doesn't employ many of those.
One of the fastest growing technology firms in Calgary is Benevity Inc., a company whose software helps clients around the world, including Google and Coca-Cola, match and encourage employee charitable giving.
Founder and CEO Bryan de Lottinville said the seven-year-old company has been doubling in size every year and has grown to about 265 employees. He has openings for 55 more staff but said he can't find suitable people, despite industry estimates that 44,000 direct jobs have been lost in the energy industry since oil prices began sliding in 2014.
Alberta's oil industry has lost tens of thousands of jobs since 2014. (Photo: Getty)
"A lot of our open positions are more technical in nature — software developers and quality assurance people," de Lottinville said.
"When technical people work in the oil and gas sector, they tend not to be as useful to pure software companies because they are doing esoteric things," he continued, suggesting they often work on dated software.
That said, de Lottinville said Benevity has benefited financially from the slowdown in the oilpatch. Some of the office space the company is leasing at its current location is being sublet by a previous tenant for just $5 per square foot, less than one-quarter of the original lease rate.
One of the biggest indirect benefits is the value of the Canadian dollar, he said, which has fallen with the price of oil.
"Most technology companies and ours specifically have an international market, which means the denigration of the dollar has helped us," he said. "The majority of our revenues are in U.S. dollars and the majority of our expenses are in Canadian."
According to Statistics Canada's June labour survey, Alberta gained 10,000 jobs in professional, scientific and technical services compared with June 2015. Over that same time span, it lost 30,000 jobs in forestry, fishing, mining, quarrying and oil and gas.
In a forecast published last year, the Ottawa-based Information and Communications Technology Council estimated Alberta would need to add at least 17,000 information technology workers to its then total of about 75,000 by 2019, with the biggest need for information systems analysts and software engineers. Report author Sharif Faisal said in a recent email he thinks the forecast is still accurate.
"Most technology companies and ours specifically have an international market, which means the denigration of the dollar has helped us."
At Innovate Calgary, the technology transfer and business incubation centre for the University of Calgary, president Peter Garrett said his client list has grown from under 100 to about 600 entrepreneurs over the past five years.
"I'm sure a portion of that is driven by the downturn in the oil and gas industry," he said.
"I think a greater portion is with students graduating from the university who are unable to find high-paying jobs downtown, so they're turning to entrepreneurship, probably more so than people who were employed downtown who are now pounding the pavement."
Forsyth came to Calgary from the United Kingdom in 2008 to join a heavy oil technology company called Oilflow Solutions that was later sold to Secure Energy Services. He was recruited by Cenovus in 2013 to run its geochemistry centre of excellence, which was assigned the task of solving oil and gas drilling problems with research both in the lab and in the field.
He said not many of the people who lost their jobs at the same time he did have found other work.
Specialization in the oil and gas industry means many are "pigeonholed," he said, pointing out it's very difficult for a reservoir engineer, for instance, to find suitable work in a different field.
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Here's a look at some of the major energy industry layoffs that have affected Alberta in 2015:
Company: Royal Dutch Shell Layoffs: Hundreds of layoffs at its massive Albian Sands project. The company announced it is laying off less than 10 per cent of its 3,000 workers.
Company: Suncor Energy Layoffs: The company announced it will layoff about 1,000 people from its workforce of 14,000. It also cut $1 billion from its capital budget
Company: Schlumberger Layoffs:Schlumberger announced they would cut 9,000 jobs in January, and another 11,000 in April, but did not report on how may of those jobs would affect Alberta employees.
Company: Newalta Layoffs: The company announced it would cut 180 people from its workforce to reduce costs and improve margins. The cuts amounted to 15 per cent of its staff.
Company: Weatherford International Layoffs: The oilfield services company said it will lay off 8,000 workers worldwide, or about 15 per cent of its workforce. According to Global News, about 1,000 of those positions affected Albertans.
Company: Cenovus Energy Layoffs: Cenovus Energy Inc. said it will cut its staff by about 15 per cent, the bulk of layoffs coming from its contract workforce. The company also suspended employee salary increases for this year.
Company: Precision Drilling Layoffs: Precision announced a net loss of $114 million, and was forced to adjust to a "swift and severe" decline in crude prices, said CEO Kevin Neveu. At the time, Neveu said about 50 fewer Precision rigs, and 1,000 fewer people, were running than at the same time a year ago.
Company: Finning International Layoffs: Finning International said it will cut 500 employees, or about 9 per cent of its Canadian workforce. Some of these cuts came to people working the Alberta oilsands or based in Edmonton.
Company: Husky Energy Inc. Layoffs: Husky Energy Inc. unexpectedly laid off 1,100 workers at its Sunrise oilsands project.
Company: Nexen Energy Layoffs: Nexen said they would slash 400 jobs "in response to the recent industry downturn." The majority of Nexen's cuts affected employees at its Calgary office.
Company: Talisman Energy Layoffs: Talisman Canada said it would reduce its workforce by 10 to 15 per cent as it grapples with low crude prices. Spokesman Brent Anderson says up to 200 employee and contractor jobs would be cut, mostly at the company's head office in Calgary.
Company: ConocoPhillips Layoffs: ConocoPhillips announced that they will cut seven per cent of their Canadian staff — or about 200 people in total. Spokeswoman Kristin Ashcroft said that some Calgary-based staff and workers in the oil field would be let go.
Company: Trican Well Services Layoffs: Trican Well Service Ltd. cut 2,000 employees from its North American workforce, including about 800 in Canada, and said it will stop paying dividends to its shareholders, citing the difficult current and future market conditions.
Cenovus Energy Inc. cut between 300 to 400 jobs in the second half of this year, on top of 800 layoffs announced in February.
Penn West announced it is cutting its workforce by 400 full-time employees and contractors — most of them working at company headquarters in Calgary.
ConocoPhillips Canada confirmed to CBC News it will reduce its workforce by about 15 per cent — 400 employees and 100 contractors. The majority of jobs lost will be in the Calgary office.
Cenovus, Suncor, Athabasca Oil and Calfrac all lay off hundreds of workers. "Unfortunately, these are the necessary steps required to weather an extended downturn," company spokesman Matt Taylor tells CBC.
Enmax, Transcanada and Enbridge all announced layoffs, totalling more than 560 employees, CTV reported.
ATCO Group laid off more than 400 people, according to The Calgary Herald, bringing the total group layoffs of the year to over 18,000 workers.