- Energy services company, McCoy Global Inc (TSX:MCB), is reducing staff and slashing its 2020 budget as the COVID-19 pandemic continues to depress oil prices
- The company has not specified how many staff will be furloughed but has stated that headcount and salary reductions are being made throughout its operations
- The company is also implementing a 25 per cent cut to the CEO’s wage and 20 per cent cut to other executive-level salaries
- By making these reductions, the company estimates it will save C$6.5 million per year but is also applying for financial aid from the US and Canadian governments to help weather the coming months
- McCoy Global Inc (MCB) is down 3.26 per cent, with shares trading at $0.44 and a market cap of $12.3 million
Energy services company, McCoy Global Inc (TSX:MCB), is reducing staff and slashing its 2020 budget as low oil prices continue to impact the oil industry.
The already low oil price has been further depressed in recent months by the ongoing COVID-19 pandemic.
The resulting downturn in global industries has reduced demand for oil and, despite Russia and OPEC+ agreeing to cap production, common oil-price benchmarks remain low.
This has caused oil companies around the world to cut back spending and reduce production, until the oil price returns to viable levels.
This has had a knock-on effect for companies like McCoy Global, which provide equipment and data collecting services to the oil and gas industry.
As a result, the company is reducing staff at its operations, but has not specified how severely.
Salaries across the entire company are also being reduced. This includes a 25 per cent cut to the CEO’s wage and 20 per cent cut to other executive-level salaries.
Furthermore, the company is making deep cuts to its capital spending budget.
Spending for the company’s production and rental fleet has been reduced by 80 per cent, on top of further cuts to general and administrative costs.
Through these drastic initiatives the company expects to save C$6.5 million per year.
Alongside these cost-cutting measures, the company has also applied for US and Canadian government relief programs to offset its remaining employee salaries.
Jim Rakievich, McCoy’s President and CEO, believes these measures will be necessary, given the steep downturn throughout the oil and gas industry.
“Capital spending plans continue to be cut materially, particularly in the North American land market, and we expect our customers will follow with significantly reduced capital equipment spending.
“McCoy has responded to the industry downturn with a plan of actions that are intended to protect our balance sheet in anticipation of revenue challenges,” he said.
McCoy Global Inc (MCB) is down 3.26 per cent, with shares trading for $0.44 at 2:06am EST.