Husky Energy cuts 1,400 jobs, posts loss of C$4.1 billion

Husky Energy reported a loss of C$4.1 billion in the third-quarter and said that it has cut about 1,400 jobs in an effort to reduce costs.

About 80% of the job cuts were contractors and 20% were full-time employees.

“Additional workforce adjustments will be undertaken as required in line with the business plan.” the Calgary-based company said in a statement.

The energy giant reported an after-tax impairment of $3.8 billion and a write down of $167 million related to legacy oil and natural gas assets in Western Canada.

Average production dropped to 333,000 barrels of oil equivalent a day from 341,000 barrels a day the previous year.

Husky chief executive officer Asim Ghosh said: “It is evident that the global oil dynamic has experienced a fundamental shift, driven by the resilience in supply,”

He added: “We are fortifying the business for today and for the long term.”

Husky said that it will pay dividends in common shares instead of cash which will provide for cash flow retention while still delivering the dividend. Cash flow for the quarter dropped to C$674 million from C$1.34 billion.

The company is also “considering a disposition of select oil and natural gas properties in its Western Canada business unit.”

“Such a disposition would not include heavy oil or oil sands assets,” Husky said in its third-quarter release.

“This would allow for a more focused capital program with a much larger proportion of capital deployed to higher return assets in a low oil price environment.”

The company’s 2016 spending plans will be announced in December.