Suncor Energy announced Friday it will be cutting staff by as much as 15 per cent over the next year and a half as the company deals with the impact of a slumping economy brought on by the global pandemic.
Staff learned of the cuts from the company’s CEO, Mark Little, via an internal webcast on Friday morning. The first tranche of layoffs, about five per cent of the workforce, will come in the next six months.
Spokesperson Sneh Seetal said the company was already undergoing a process to improve its cost structure that would have resulted in a smaller workforce over time, but current events have changed the timetable.
“Unfortunately, the unprecedented drop in oil prices, the continued impact of the global pandemic, an economic slowdown as well as continued market volatility have accelerated those plans,” she said.
“And as a result, over the next 12 to 18 months, we will reduce the size of our workforce by about 10 to 15 per cent.”
Seetal was unable to say how many people those cuts would affect, but noted that at the end of 2019, the Calgary-based company had 13,000 employees. Suncor employs people across the country, in the United States and internationally. Seetal said everything is under review.
“We are looking at all operations, all of our assets, all of our offices across our workforce, with the exception of not making any decisions that would potentially impact safe and reliable … running of our assets,” she said.
According to the Canadian Association of Petroleum Producers (CAPP), more than 28,000 direct and 107,000 indirect jobs have been lost in the sector in 2020.
Due to the industry’s wide supply chain, those job losses have impacted every region of the country, the association said.
“The reality of the current situation is grim and taking a toll on the industry and on Canadians,” CAPP’s chief executive, Tim McMillan, said in a statement.
Earlier this week, Royal Dutch Shell said it’s planning to cut between 7,000 and 9,000 jobs worldwide by the end of 2022. But the implications for Shell’s Canadian operations or its 3,500 employees isn’t yet known.
Suncor’s cuts appear to be part of the drive for efficiency that can be seen in the sector now, said Rory Johnston, managing director and market economist at Price Street in Toronto.
The reality of the current situation is grim and taking a toll on the industry and on Canadians.– Tim McMillan, CAPP chief executive
“The drive now is going to be to increase efficiency and increase the amount of value they can extract from each barrel of their core production base,” Johnston said.
“You might get a little bit of production growth, but I think the days of heavy growth are mostly behind us.”
Unfortunately, he said, that also means fewer jobs.
“I truly hope not, but I would not be surprised if we see some of the other Canadian majors follow suit,” Johnston added.
Alberta Premier Jason Kenney called news of Suncor’s layoff plans “very disturbing.”
“This announcement today by Suncor underscores that what’s happening in Alberta today is nothing less than an economic emergency,” Kenney said.
He said Alberta is facing the largest economic crisis since the Great Depression due to a global economic contraction that’s lead to the “largest decline in energy prices in history.”
“On top of five tough years, it is hard to overstate the economic adversity that so many Albertans are going through,” said Kenney, who called on Ottawa to work with the province to get the industry “back on its feet.”
Kenney said the federal government should “hit the pause button” on the clean fuel standard, which he argues will make Canada’s energy sector uncompetitive globally.
“As today’s announcement underscores, this truly is a jobs crisis and an economic emergency, and it deserves to be responded to here in Alberta in the same way that it would be in Ontario or Quebec,” he said.
However, Alberta NDP Leader Rachel Notley took aim Friday at the Kenney government’s decision to cut corporate taxes for companies like Suncor, pointing a finger at the job losses that have since followed.
“Jason Kenney made a bad deal,” Notley said in a statement.
“Instead of shoveling money off the back of a truck to finance corporate layoffs, the premier and his UCP need to build a plan to guarantee job creation and job protection.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
