Ovintiv Inc. laid off 640 staff, or about 25% of its work force last week, just 7½ months after triggering a wave of overwrought grief in Canada by changing its name from Encana Corporation and moving its head office out of Calgary.
The Globe and Mail says the company is trying to “cope with what it sees as a new era of lower production growth in the midst of the COVID-19 crisis” by cutting jobs in all its field locations, and at its three main offices in Woodlands, Texas, Denver, and Calgary. It’s looking to save US$200 million this year, with a cost reduction plan that also includes 60% less capital spending through the second quarter of the year, and scaling back daily oil production by up to 65,000 barrels.
“Even though we are a little less than halfway through the year, it has clearly been one to remember, or maybe forget,” wrote CEO Doug Suttles in an internal staff memo. “We’ve all faced many challenges and incredible uncertainty. The decisions we implemented this week were difficult but necessary, but they are now behind us.”
The harsh cuts “have not been made just to deal with a short-term loss of energy demand,” the Globe adds, citing Ovintiv spokeswoman Cindy Hassler. “The company believes the industry is preparing for lower production growth, and is concentrating on strengthening corporate balance sheets by reducing debt.”