Cenovus Energy, one of Canada’s largest thermal oil producers and a major Calgary employer, has quietly cut jobs just days before releasing what are expected to be underwhelming first-quarter earnings.
In a statement confirming the layoffs, the company said it had “reviewed some team structures,” which resulted in an unspecified number of employees and contractors leaving the organization.
The cuts are part of what Cenovus described as a “continued focus on being more competitive across all areas of our business,” and also reflect the completion of various projects.
At least 50 workers were laid off at one Alberta location, triggering mandatory government notification.
The timing comes amid mounting investor concerns over its share price and long-term growth prospects After oil prices hit a five-year low this week.
Cenovus shares have plunged nearly 30% over the last six months, closing Tuesday at $16.33 on the Toronto Stock Exchange dragged by sagging oil prices and chronic underperformance in its US refining division.
The company’s net earnings fell from $4.1 billion in 2023 to $3.1 billion in 2024, despite a slight increase in annual revenues.
Spun out of the split from EnCana in 2009, Cenovus has long been seen as a key player in Canada’s oil sands sector.
Its assets are considered high quality, but growth has come at a cost. The company has reallocated cash from its natural gas operations to fund long-term oil sands expansion, leaving it exposed to short-term volatility in both global oil prices and refinery margins.
Despite boasting some of the most promising thermal oil sands assets in the country, Cenovus now finds itself caught between long-term ambition and the near-term realities of a weaker commodity environment, soft refining margins and mounting investor impatience.
Analysts said Cenovus will need to offer a “more upbeat” outlook during Thursday’s earnings call and annual general meeting to restore investor confidence in its heavily discounted stock and prevent it from becoming a takeover target.
RBC Wealth Management has also flagged the ongoing performance drag from Cenovus’ refining division as a major factor behind its recent earnings softness.
Alberta’s provincial government acknowledged the layoffs this week and said it is working to support affected workers through career services, retraining programs, and job placement support via its ‘Alberta at Work’ initiative.