Energy companies have cut thousands of jobs and scrapped projects in a drive to cut costs and now workers benefits are being affected.
Holiday parties, childcare benefits and Fridays off are being targeted as the rout in crude prices grinds into its 16th month, workers and company representatives say. The clampdown on perks comes as firms dig deeper for savings after eliminating about 36,000 oil and natural gas jobs in the crash, according to a tally by the Canadian Association of Petroleum Producers.
At Canadian Natural Resources Ltd.’s office in Aberdeen, Scotland, the only microwave is in overdrive after the cafeteria stopped serving hot meals and raised the price of sandwiches. The coffee cups are smaller, too. While the company has avoided job cuts, salary reductions of as much as 10 percent mean some workers are also earning less.
ConocoPhillips, which is cutting 500 workers in Canada this year, removed complimentary juice and soda from fridges in Calgary and canceled personal development benefits of as much as C$1,500 ($1,153) a year that some employees used for sports training.
Cenovus Energy Inc. is weighing whether to end the practice of employees getting two Fridays off a month. The company already reduced its travel and training budgets and has eliminated 1,340 jobs.
Fiscal Prudence “In times of fiscal prudence, it’s essential to see companies eliminating all unnecessary expenditures,” said Eric Nuttall, a portfolio manager at Sprott Asset Management LP in Toronto. “This whole every second Friday off thing, that’s the most egregious example.”
The changes to incentives at Canadian Natural and ConocoPhillips are according to people familiar with the moves, who asked not to be identified discussing private matters. Kristen Ashcroft, a spokeswoman at ConocoPhillips, said the company won’t confirm specific cost-reduction actions. Julie Woo, a Canadian Natural spokeswoman, declined to comment.
At Cenovus, “no stone is being left unturned” in a broad review of workforce policies, said Brett Harris, a spokesman. Employees currently work longer hours on other days to earn the Fridays off, he said.
‘Grim Reality’ Tobias Read, chief executive officer of staffing consultant Swift Worldwide Resources, said retirement and childcare benefits are also being scaled back along with social events, as companies offer unpaid leave and work-share programs on top of salary reductions and job cuts.
“You are seeing a radical change in the incentives,” Read said. “It’s a grim reality that if they don’t reduce costs in every area, the situation will be dramatically worse.”
Companies are driven to get rid of perks to prove to shareholders they’re serious about lowering costs, said Chris Feltin, an analyst at Macquarie Group Ltd. in Calgary.
“One of the only factors you can control is costs,” he said.