Cameco (NYSE:CCJ, TSX:CCO) has inflicted more pain on its payroll as Canada’s largest uranium producer struggles amid a flat market for the nuclear fuel.
The company announced it plans to lay off 10% of its workforce at the McArthur River, Key Lake and Cigar Lake operations, or 120 employees in total.
The layoffs will be done in phases, beginning this month and ending in May. Affected employees will be offered exit packages that include transition assistance.
Cameco also plans to implement changes to the air commuter service by which employees and contract workers get to and from the mine and mill sites in northern Saskatchewan, as well as work schedule changes, to achieve additional cost savings. These changes will begin in April 2017 and are expected to be completed during 2018.
“These are necessary actions to take in a uranium market that has remained weak and oversupplied for more than five years. While it is positive that we are starting to see other producers announce their intent to reduce supply, we have not yet seen an actual reduction in supply,” president and CEO Tim Gitzel said in a statement.
“Ultimately, it will be the return of both term demand and term contracting in a significant way that will signal that market fundamentals have turned more positive. While we expect that this demand and term contracting will come to the market at some point, it has not yet happened. These operational changes are part of our strategy to help us effectively manage the company through these low times and remain competitive, while positioning the company to benefit as the market improves.”
Last week’s cost-cutting follows the more drastic shutdown of the Rabbit Lake mine in April, which affected 500 employees, along with the loss of 85 positions in the U.S.
Cameco said after accounting for one-time costs of between $180 million and $220 million, it expects to show a net loss and lower than anticipated adjusted earnings for 2016.