The company reported a significant drop in expected revenue in the first quarter, due to low metal prices. The company reported a sharp 68% drop in adjusted first quarter profit.
It also announced it would be delaying the restart of one of its B.C. coal mines, but will move ahead with its Washington State zinc mining.
The layoffs amount to 5% of the company’s total workforce. Teck said the cuts will come through attrition, hiring freezes, and reductions in contractors and employees at its mines and corporate offices.
The job cuts are part of a much broader cost reduction program the company has implemented. Teck said it has achieved $345-million of annual cost cuts to date. It is now targeting another $200-million of cost cuts, along with a $150-million reduction in capital spending.
“We are pleased with our operating performance in the first quarter, with higher production volumes for our major products,” chief executive Don Lindsay said in a statement.
“However, prices for these commodities were weak, particularly coal, compared to the first quarter of 2013, resulting in lower profits and cash flows than last year. As a result, we are increasing our efforts to reduce our costs and capital spending.”
Looking ahead, Teck repeated its warning that the recent weakness in commodity markets could persist “for some time.”
Last year Saskatchewan’s Potash Corp announced it would be cutting close to 1000 workers due to reduced international demand for potash and phosphates, which are used in fertilizer.
Conference Board of Canada economist Julie Ades told HRM that the large scale cuts across a range of industries reflect a variety of different factors, but that overall the organization expected job growth in 2014. However, that growth will have to come from export industries, not domestic demand.
“The shift to exports is taking a little while because of uncertainty at the global stage. This could affect employers’ willingness to hire in Canada,” she said. “For 2014 the outlook should be brighter. Overall soft domestic demand will continue to provide downward pressure on employment growth in the near term, but if you look further ahead stronger exports and straightening residential and non-residential investment will support better job gains next year.”
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Vancouver mining company Teck Resources Ltd. announced it will cut its workforce by about 600 workers as a cost reduction tactic.