With Cenovus due to complete the acquisition of rival Canadian energy company Husky Energy Inc., the former is expected to significantly reduce its own costs, the company stated on Tuesday.
The cost reduction process is set to include widespread retrenchment, potentially including up to 2,150 job losses. The energy company has been severely affected by the coronavirus pandemic and its downward effect on the demand for fuel. In addition, Cenovus and Canada’s oil sand producers at large have already been faced with an economic downturn for the past six years.
Husky spokesperson Kim Guttormson said of the acquisition: “As with any merger of this type, there will be overlap and there will be some difficult decisions as we work to create a combined organization best positioned for the future.”
With the new company aiming to save C$1.2 billion, almost half of this amount will be reached through job cuts as well as reductions to overhead costs such as streamlined IT systems. This is set to be the Canadian oil patch’s largest merger in the last four years.
Following the confirmation of the job cuts, Cenovus shares have risen by 6.7% while Husky has enjoyed a 6.5% rise.
