(Reuters) Canada-based crude pipeline operator Enbridge said it will reduce its workforce by 650 jobs, or 5%, in a bid to cut costs.
Enbridge operates North America's biggest oil pipeline network, the Mainline, which moves Canadian crude from Alberta to U.S. and eastern Canadian refineries, as well as the continent's largest natural gas utility.
In September, the company surprised investors, saying it would acquire three U.S. gas utility companies from Dominion Energy for $14 billion. Its shares tumbled to a four-year low on news of the deal as investors fretted about the company's debt load.
North American pipeline operator Enbridge to cut 650 jobs
Enbridge employs 12,000 people, according to its website. The Calgary, Alberta-based company said the cuts will begin in February and be completed by March 1. It will reduce vacant positions, contract positions and redeploy staff where possible, Enbridge said.
"Cost-reduction measures are necessary to maintain our financial strength, be more cost-competitive and enable us to grow," Enbridge said in a statement. "Persistent headwinds - including higher interest rates, economic uncertainty and the ripple effects of geopolitical developments - all contribute to increasingly challenging business conditions across many industries."
The company said it did not have specifics on how business units and regions would be affected.
Enbridge stock rose slightly in Toronto on Tuesday.
The job cuts seem "realistic given the current economic environment," and are not a material shift for a company as large as Enbridge, Morningstar analyst Stephen Ellis said.
In November, Enbridge forecast higher 2024 core earnings and raised its dividend. The company reports fourth-quarter results Feb. 9.
Rival TC Energy cut an undisclosed number of jobs last year.
Enbridge, which owns and operates pipelines throughout Canada and the United States, has four core businesses - liquids pipelines, natural gas pipelines, gas utilities and storage, and renewable energy.
The Calgary Herald newspaper first reported the job cuts.
