Layoffs in the Oil Patch 3

[RichieRich]

Originally Posted by Da_Chief

Any lawyer recommendation for layoff package review?

This is such a massive thread now it's so hard to find info... myself and some co-workers may be looking for legal reviews of our respective layoff severance packages. All worked as Staff for a Calgary-based energy company. All recommendations appreciated.

[nik-]

How bad is it? There's usually a pretty significant delta between even a "bad" O&G severance and the legal requirements.

[Locke]

Originally Posted by nik-

How bad is it? There's usually a pretty significant delta between even a "bad" O&G severance and the legal requirements.

Yeah, thats important. Especially considering that even the typically generous industry standard has been eroding rather rapidly over the past 5 years or so.

[nik-]

Yeah, even the "established industry custom or practice" flexibility has been eroding for years. The "one month per year" standard hasn't been a standard for a while now. People can still get it, but it's in excess of the norm.

[Locke]

Originally Posted by nik-

Yeah, even the "established industry custom or practice" flexibility has been eroding for years. The "one month per year" standard hasn't been a standard for a while now. People can still get it, but it's in excess of the norm.

And still vastly in excess of the legal requirements.

[burn_this_city]

3 weeks per year seems to be the recent number.

[RichieRich]

Originally Posted by nik-

How bad is it? There's usually a pretty significant delta between even a "bad" O&G severance and the legal requirements.

Having worked in fabrication shops myself for a number of years I'm well aware of perceptions, entitlements, and actuals when compared to others.


Therefore I'd rather not get into the specifics for myself or others affected. Certainly there is a substantial gap between legal requirements and some levels in the O&G. Regardless, the point of the legal review/exercise is comparison and fairness between relative peers within a specific industry given current market and prospects, and not conflating the issue with Apples to Watermelons comparisons.

[OldDutch]

Originally Posted by Krovikan

Working in IT/IS for as long as I have, any company that is sending IT offshore to save cost is in for a rude awakening. It'll end up costing the company more and they will get far less, then if they just kept it local.

I think there is a place for outsource, but has to be strategic. Working in the model for years now, I can confirm it isn’t more productive as in house in every case, but neither is in house more productive than offshore in every case.

From what I have seen is outsource is done mainly by executives to appease their boss or the share holders. Lower OpEx. You can’t win that one in a public company.

I think we just need to accept it isn’t going away and deal with it. Source the areas that are dead simple to start, give the provider room to earn more. Have a second provider for healthy Competition. That is key, as soon as the provider signs for years they begin roll off of top talent. Last lock in named talent, don’t do outcome based. You top performers have to stay, if not you get a D list cheap person.

I can write a book on doing this. Seen a lot over the years. I think a hybrid model is the way to balance cost and output. There is always room for top talent in house in IT but there is less space. Those in house that stay need to be watching outsource closely. You need them to know what motivates them and play the game. It actually can work, not ideally but is what it is.

[Roughneck]

Originally Posted by Krovikan

Working in IT/IS for as long as I have, any company that is sending IT offshore to save cost is in for a rude awakening. It'll end up costing the company more and they will get far less, then if they just kept it local.

'The savings of this decision will be my success. The future costs associated with it will be the next guy's problem.'



-MBA Training Guide, probably.

[Krovikan]

Originally Posted by OldDutch

I think there is a place for outsource, but has to be strategic. Working in the model for years now, I can confirm it isn’t more productive as in house in every case, but neither is in house more productive than offshore in every case.

From what I have seen is outsource is done mainly by executives to appease their boss or the share holders. Lower OpEx. You can’t win that one in a public company.

I think we just need to accept it isn’t going away and deal with it. Source the areas that are dead simple to start, give the provider room to earn more. Have a second provider for healthy Competition. That is key, as soon as the provider signs for years they begin roll off of top talent. Last lock in named talent, don’t do outcome based. You top performers have to stay, if not you get a D list cheap person.

I can write a book on doing this. Seen a lot over the years. I think a hybrid model is the way to balance cost and output. There is always room for top talent in house in IT but there is less space. Those in house that stay need to be watching outsource closely. You need them to know what motivates them and play the game. It actually can work, not ideally but is what it is.

There are outsourcing that makes sense, for example, Longview, Greycon, etc. for general IT, MSPs for specific service, vendor ProfServ departments for even more specialized work. However, you aren't outsourcing to those companies to save you money on the hourly rate. You are outsourcing to those companies because they specialize in finding the right talent, and getting higher quality service that you will end up saving you money as they will get the job done faster.

If you are looking at general IT and you just look at the general hourly rater, ya it looks good. India at $15/hour, internal at $30-75/hour, local IT vendor $75-150. But if help desk calls take more calls to solve, the resolution cost of each issue goes up.

I use India as an example as I've worked with the big shops there the most.

The issue I see with having multiple vendors in a company is you can cause confusion as to who is responsible for what. The cost of hiring business people to properly set up the divisions of labour and internal policies and training so your staff knows who to call and when adds up.

I'm not saying it isn't possible, I'm just saying it's expensive, and there are probably better and cheaper options. But you are right, companies do it because it is an easy sell to shareholders. They can say I just cut my hourly rate of IT by 1/2 or 1/3. Multiply that by current resolution time, and claim that you saved the company X, and no one will notice that you didn't actually save anything in the long run.

If I was a shareholder of a company that announced overseas outsourcing, I would wait for the good news bump then sell. I wouldn't trust the executives anymore.

If it is even good news, look at RBC, they tried to do overseas outsource and suffered a massive blowback in the media, then realized it was a bad idea anyway.

[Samonadreau]

Hearing more about Shell's layoffs... going to be a slaughter.

[CaptainCrunch]

I wouldn't be surprised if the unemployment in this province is between 30 and 40% by the summer. We might not need to worry about equalization anymore, we might be taking money from Quebec.


The Federal Government has been humming and hawing over their promise that actual help was on the way in hours or days for 2 months now, its time for them to get off the can and do it.

[lazypucker]

I am surprised that the likes of Husky, Cenovus, and Shell still have people left to lay off. I thought years of heavy trimming had left those companies with no workers remain...

By the way, I've heard that it is estimated that 1 out of 4 Albertans is unemployed right now, this is going to suck big time.

[1qqaaz]

Originally Posted by CaptainCrunch

I wouldn't be surprised if the unemployment in this province is between 30 and 40% by the summer. We might not need to worry about equalization anymore, we might be taking money from Quebec.


The Federal Government has been humming and hawing over their promise that actual help was on the way in hours or days for 2 months now, its time for them to get off the can and do it.

Taking money? Maybe someday.
From Quebec? That's laughable.
They'll always be on the receiving end.

[CaptainCrunch]

Originally Posted by lazypucker

I am surprised that the likes of Husky, Cenovus, and Shell still have people left to lay off. I thought years of heavy trimming had left those companies with no workers remain...

By the way, I've heard that it is estimated that 1 out of 4 Albertans is unemployed right now, this is going to suck big time.

I think 1 and 4 is awfully optimistic, I read a couple of weeks ago that when you combine the people on unemployment with the people laid off and on Cerb, and the long term unemployed that have run out of benefits its over 30%

[Manhattanboy]

This is so sad. Trudeau and the Liberals can just eff off for good.

What other examples are there of first world countries where the federal or national government has so deliberately abandoned a once prosperous region that for years contributed so much to the economic well being of the country as to essentially and significantly lower the standard of living of that part of the population?

[calgarygeologist]

Originally Posted by Samonadreau

Hearing more about Shell's layoffs... going to be a slaughter.

My buddy works for Shell in Houston and next week is supposed to be the layoff notice. He tells me they expect 40% down there and about 50 to 60% in Calgary.

[Northendzone]

Meh, oil is dead anyways. McKenna has tweeted that any displaced workers can easily transition into the green energy sector with a week of training.

We will be shipping money to Quebec again very very soon.

End sarcasm.

This liberal regime has got to be the worst government ever. Bunch of amateurs so bent on a single goal of destroying good jobs and wealth while making Canada weaker. Unbelievable. Makes me sick when morneau is asked financial questions and all he offers up is a word salad. Clearly meant as as a distraction play while they seemingly set up for the next election.

[Samonadreau]

Originally Posted by calgarygeologist

My buddy works for Shell in Houston and next week is supposed to be the layoff notice. He tells me they expect 40% down there and about 50 to 60% in Calgary.

Ya its gonna be bad. Previous Re-orgs saw like 5-10% layoffs. This will be 50% of Unconventionals full time positions for North and South America.

[OldDutch]

Originally Posted by Krovikan

There are outsourcing that makes sense, for example, Longview, Greycon, etc. for general IT, MSPs for specific service, vendor ProfServ departments for even more specialized work. However, you aren't outsourcing to those companies to save you money on the hourly rate. You are outsourcing to those companies because they specialize in finding the right talent, and getting higher quality service that you will end up saving you money as they will get the job done faster.

If you are looking at general IT and you just look at the general hourly rater, ya it looks good. India at $15/hour, internal at $30-75/hour, local IT vendor $75-150. But if help desk calls take more calls to solve, the resolution cost of each issue goes up.

I use India as an example as I've worked with the big shops there the most.

The issue I see with having multiple vendors in a company is you can cause confusion as to who is responsible for what. The cost of hiring business people to properly set up the divisions of labour and internal policies and training so your staff knows who to call and when adds up.

I'm not saying it isn't possible, I'm just saying it's expensive, and there are probably better and cheaper options. But you are right, companies do it because it is an easy sell to shareholders. They can say I just cut my hourly rate of IT by 1/2 or 1/3. Multiply that by current resolution time, and claim that you saved the company X, and no one will notice that you didn't actually save anything in the long run.

If I was a shareholder of a company that announced overseas outsourcing, I would wait for the good news bump then sell. I wouldn't trust the executives anymore.

If it is even good news, look at RBC, they tried to do overseas outsource and suffered a massive blowback in the media, then realized it was a bad idea anyway.

Maybe us IT geeks should setup a thread on this topic. Maybe in the Tech Talk section.

Anyways, I won't argue your points. They are standard IT management view on Outsourcing and some of the points I agree with.

What I will say is the view that always prevails is the shareholder view. CEO gets paid based on share performance. Lower OpEx equals (in general) better share performance. Who reports to the CEO...the CFO. Generally IT is as easy a lower OpEx argument as you are going to get.

Why? Speaking from experience most companies don't value the work IT does. IT in many cases actually does a fairly bad job at being a true partner in most organizations. IT folks love to hire business partner staff, and claim they are at the table, but in actuality they are not. They are too busy infighting, and have trouble executing and showing value back, let alone being an organizational leader.

The view at the top is: "these guys can keep doing what they are doing (whatever they do besides keep Outlook running and failing on projects!?!), and we will be fine. Besides IT is a cost center not a revenue generator."

This view is especially prevalent in O&G. We will call the IT guys when we figure out our business plan. I have seen it countless times.

That right there is prime outsourcing target. A group that costs money and shows little value. No one is going to fight at the big table over that.

I know the sum is less productivity in most cases, but that is a metric for the CIO. The CEO metric is shareholder value. If you have a CIO that has you in a true partner position (which is as amazing as rare) then you have a shot to balance, otherwise you are not going to win in a public company.