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Survey shows two-thirds of energy company employers cut labour costs due to COVID-19

Last Updated Nov 20, 2020 at 4:57 pm EST

A pumpjack works at a well head on an oil and gas installation near Cremona, Alta., Saturday, Oct. 29, 2016. The Petroleum Services Association of Canada is cutting its 2020 Canadian drilling forecast for a third time as the industry remains mired in a slump expected to extend well into the second half of the year. THE CANADIAN PRESS/Jeff McIntosh

CALGARY — A survey by energy labour market organization PetroLMI shows that more than two-thirds of the employers in Canada’s oil and gas sector imposed labour cost reduction measures in the wake of the COVID-19 pandemic lockdowns, including 37 per cent who enacted permanent layoffs.

The division of Energy Safety Canada surveyed 300 energy industry workers in August and September and interviewed 13 company leaders in September and August for its four-part report looking into industry reaction to lockdowns that slashed global oil demand, leading to rapidly falling oil prices.

It found that 35 per cent of the companies invoked a hiring freeze, 29 per cent cut executive pay, 28 per cent trimmed worker pay, 27 per cent had temporary layoffs and 21 per cent restricted work hours.

Only 32 per cent did nothing to reduce labour costs.

The survey found that only 13 per cent of energy workers worked from home at least one day per week before COVID-19 but that rose to 70 per cent in March, with 57 per cent working from home at least five days a week.

At the time of the survey, 47 per cent were still working from home at least one day per week and 31 per cent were working from home five or more days per week.

“Due to the sudden economic impact resulting from the COVID-19 pandemic after five years of depressed oil prices, energy employers had to find ways to reduce operating costs,” the report notes.

“While nearly four in 10 energy workers surveyed said their company implemented permanent layoffs, many companies were seeking alternatives to layoffs.”

On its website, PetroLMI notes that oil and gas employment increased by 4,450 jobs in October to 164,590 compared with September, but was down 12 per cent or 21,400 from October 2019.

This report by The Canadian Press was first published Nov. 20, 2020.

The Canadian Press