Yahoo Finance Suncor (SU) to Lay Off Employees Amid Decline in Oil Price
Suncor Energy SU said that it will terminate 10-15% of its workforce in 12-18 months as the company copes with the impacts of the pandemic that has affected its economic performance. The Calgary-based company currently engages about 13,000 people across the country and internationally which would imply a job loss of about 2,000 employees. The workforce reduction was first announced by the company’s CEO, Mark Little, over the internet.
Per a Suncor spokesperson, it was already planning to reduce expenses, which would have led to a streamlined labor force over time. However, recent events have changed the scenario. The unusual drop in oil prices and the unprecedented destruction of energy demand triggered by the pandemic have accelerated the plan.
Suncor also faced operation hurdles like the base plant firing incident which forced the firm to cut back its production outlook. The company already scaled down its production for this year from 800,000-840,000 barrels of oil equivalent per day to 680,000-710,000 barrels.
As mentioned by 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. Suncor is exploring all possible approaches to make those cuts through early retirements and employees taking voluntary buyouts. The company’s senior management declared that they were taking voluntary pay cuts amidst the pandemic.
Suncor’s austerity drive is likely to increase efficiency and improve its productivity. The company and other oil giants have come under pressure due to the sudden drop in oil prices by the lack of demand due to the coronavirus outbreak.
Company Profile & Price Performance
The Canada-based energy company specializes in the production of synthetic crude from oil sands. It’s shares have underperformed the industry in the past six months. Its shares have lost 27.4% compared to the 19.2% decline of the composite stocks belonging to the industry.
Zacks Rank & Stocks to Consider
Suncorcurrently carries a Zack Rank #4 (Sell). Some better ranked players in the energy space are Gulfport Energy Corporation GPOR, PDC Energy Inc. PDCE and Smart Sand Inc.SND each currently sporting a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, the Zacks Consensus Estimate for 2020 earnings for Gulfport Energy has been raised 633.3% and for PDC Energy it has been raised by 519%.
Smart Sandis expected to see revenue growth of 12.3% in 2021.
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Suncor Energy Inc. (SU) : Free Stock Analysis Report
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