Canadian Manufacturing

Oil and gas restructurings have succeeded, EY reports

While Alberta has lost 30,000 oil and gas jobs since Q4 2014, companies who reduced their headcount by a third have reported success in reorganization

February 23, 2017  by Canadian Staff

CALGARY—Canadian oil and gas jobs have been cut in the midst of the industry’s doldrums, but companies have reported success as a result of restructuring.

According to a new Ernst & Young (EY) market study, completed in association with the University of Calgary’s Haskayne School of Business, 81 per cent of oil and gas companies that reduced their headcount by between 25 per cent and 30 per cent during the downturn reported the highest level of reorganization success.

In Alberta alone, the industry has seen direct job cuts of nearly 30,000 since the fourth quarter of 2014, according to the Government of Canada Labour Market Bulletin.

80 per cent of companies surveyed by EY have reduced headcount over the last two years. Of those, 64 per cent took the opportunity to restructure internally—shifting work, role changes, streamlining processes or consolidating areas, functions or business units.


When it comes to successful reorganizations, survey respondents indicated a direct correlation between increased upfront rigour and higher levels of success.

The report highlights that, among successful reorganizations, companies were more likely to consider their short and long-term goals, conduct external benchmarking and make actual changes to how work gets done.

“Our study results point to a clear relationship between greater headcount reductions and overall perceived success of reorganization efforts,” said Lance Mortlock, EY’s Canadian Strategy Services Leader, Oil and Gas. “The caveat however, is that this relationship becomes weaker once companies surpass a 50 per cent headcount reduction. So we’re really seeing an optimal point where companies reduced headcount between 25-35 per cent.”

Mortlock continued, “Structural change is underway in the oil and gas industry, and successful companies will have to fundamentally change their business constructs, and refocus on their people and processes to be competitive.”

Read the full report, Canadian Oil and Gas Reorganizations, here.