Literally days after Goldman Sachs warned of mergers and acquisitions leading to job losses, it appears we have our first real world example. Reuters is reporting this morning that two sources have indicated that significant job losses are to occur as a result of the proposed merger between Cenovus Energy (TSX: CVE) and Husky Energy (TSX: HSE) that was announced Sunday night.
As it turns out, Cenovus plans to cut somewhere between 20% and 25% of employees from the combined entity once the merger is completed. While any merger can expect resulting job losses due to duplication of certain functions, the figure seems sky high given the cumulative workforce figures between the two firms.
Following the leak from two sources, Cenovus evidently confirmed with rumour with Reuters, indicting that job losses could total approximately 2,150 positions across the board. Much of the losses are expected to occur in Calgary, Alberta, where both firms currently have their head offices located.
It’s currently unknown when the planned job losses will take effect.
Cenovus Energy last traded at $3.62 on the NYSE.
Information for this briefing was found via Sedar and Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
