Potash Corp. laying off over 1,000 workers
PotashCorp (TSX, NYSE: POT) the world's largest potash miner by capacity, is cutting 18% of its workforce, or about 1,045 people, with the biggest hits to be felt in Canada’s provinces of Saskatchewan and New Brunswick, as well as in Florida.
The Saskatoon-based company said Tuesday the decision was necessary because of soft demand for potash and phosphates, which are used to make fertilizer.
"This is a difficult day for our employees and our company," said Bill Doyle, PotashCorp's president and chief executive in today’s statement.
"While these are steps we must take to run a sustainable business and protect the long-term interests of all our stakeholders, these decisions are never easy.
"We understand the impact is not only on our people, but also in the communities where we work and live, and PotashCorp will work hard to help those affected through this challenging time."
PotashCorp said the biggest job cuts would be in its home province of Saskatchewan, where 440 people will be affected, representing roughly 42% of the total affected by the downsizing.
The firm added it will suspend production at one of its two Lanigan mills in the prairie province and will cut production at its Cory facility in the same province by the end of the year.
PotashCorp also said it expects to take a charge of about $70 million for severances and may be required to take a writedown on the carrying value of its affected assets.
Saskatchewan Premier Brad Wall told GlobalNews the province would be dispatching “immediately” its response teams to provide support to the locals affected by the job cuts and explore other opportunities in other sectors.
“We are fortunate that this has occurred at a time of relative labour market strength and that our economy today is more diversified than ever,” Wall said.
Potash revenue currently accounts for only 3.5% of the province’s $11 billion budget.
In October, Potash posted a 45% drop in third-quarter profits and cut its 2013 earnings guidance for a second time this year.