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Oil and gas producer Penn West Petroleum has announced it will be cutting approximately 35 per cent of its workforce with most of the cuts to take place in Alberta.
The company’s workforce will be cut by 400 full-time employees and contractors mostly working at Penn West’s headquarters in Calgary. The cuts are effective immediately and the rest are expected to take place by the end of the year.
Penn West is a prominent mid-sized oil and gas producer and says the reduction is part of a response to the decline in oil prices. It will also be suspending dividend payments to shareholders after October and will reduce compensation for its board of directors.
"We continue to take concrete steps to strengthen our balance sheet," said Dave Roberts, President and CEO of Penn West, "Limiting our capital programs to the funds flow generated from our assets and suspending our dividend are necessary steps. Building on a combination of process and efficiency improvements over the past 12 to 18 months, we are taking further actions today to significantly reduce our cost structure without impacting our ability to execute. We remain flexible and well positioned to move forward when oil prices improve."
Penn West is the latest oil and gas producer to announce major layoffs due to the slumping price of oil. In January, Suncor announced 1,000 layoffs, while Shell Canada cut up to 300 jobs at its Fort McMurray operations. More recently, Schlumberger announced more than 11,000 layoffs worldwide, and Calgary-based Trican Well Service cut 2,000 jobs in North America.
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