Barrick Gold (ABX-T, ABX-N) will save US$50 million a year by laying off 80 people from its head office in Toronto, the first major staff reduction after decades of growth.
The job cuts work out to about 16% of its 500-person-strong workforce in Toronto, according to Barrick spokesman, Vince Borg.
Borg, who’s worked for the company for 18 years, has never seen head office cuts this severe.
“I certainly don’t recall anything in head office as significant as this,” Borg said in an interview.
The bulk of the layoffs will be in finance and technical services. More responsibility and accountability will be given to the regional offices.
Senior management conducted an internal review to see how they could improve the organizational structure. No outside consultants were used.
Borg says the last organization review was in 2003. At that time the company adopted a corporate regional business model.
“So we started staffing up the regional units,” Borg explained.
But growth contributed to the glut when Barrick took over Placer Dome in 2006.
“We came to a conclusion that we had built up some overlap in responsibilities between regions and corporate and identified positions that could be eliminated,” Borg said of the current review.
Barrick will take a US$30-million charge, split between the third and fourth quarters for the staff reductions.
Borg says the combination of labour compensation, benefits, travel costs, overhead, contractors, offices space and support services will all contribute to the US$50 million in savings.
No senior positions are being eliminated. Barrick eliminated two senior positions in July as a part of its efforts to streamline the company: the vice president of organizational effectiveness and the executive vice president of exploration and corporate development.
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