CALGARY -- CTV News has learned Cenovus Energy plans to cut upward of 2,000 positions over the next two months, with the first round of layoffs expected to begin Tuesday.
According to a source that validated the total layoff numbers, Tuesday's announcement will be followed by additional job cuts that are anticipated to take place over the course of two phases in February or March.
An internal memo confirms the vast majority of affected workers will receive termination notices by phone as work from home mandates remain in effect
The move comes after the company finalized a deal to buy Husky Energy earlier this month and announced up to 2,150 jobs — roughly a quarter of its workforce — would be lost as a result of the mega-merger. The acquisition of Husky Energy is valued at $23.6 billion, inclusive of debt.
"As we have previously said when we announced the Cenovus-Husky transaction, the combination means there will be overlap and redundancies in a number of roles across our business that will result in workforce reductions taking place over the course of this year," said Reg Curren, a Cenovus Energy spokesperson, in a statement sent to CTV News Tuesday morning.
Industry analysts say these types of mergers are very rare, but more could be in the cards.
“I think we have to go back to the Cenovus (and) ConocoPhillips deal to get one of comparable size several years ago,” said Kevin Birn, analyst at IHS Markit.
“I expect to see it, but with smaller scale companies. That doesn’t mean this isn’t a negative impact as they occur in terms of job losses, this is about these companies building more resilient profiles and strategies over the long term.”
Birn says consolidation is key to a prosperous industry again, taking lesser players out of the market.
“When we see the consolidation over the last five years and you can think of it as very simply, the scale of the targets left in this market have consolidated down,” said Birn.
Dr. Sara Hastings-Simon is a research associate at the Payne Institute.
She believes Alberta can be prosperous again, by diversifying the economy with current infrastructure.
“The province is in a strong position in terms of having very strong educational institutions, really strong infrastructure that has come from our prosperous history in the oil sector,” said Hastings-Simon.
Cenovus says the amalgamation will see production of 660,000 barrels of oil daily, with a cost savings of $1.2 billion annually.