PotashCorp announces today that it will take what it calls the 'difficult but necessary step to reduce its workforce in Canada, the United States and Trinidad'. In a statement from CEO Bill Doyle, the company says that declining market conditions in the fertilizer sector have forced PotashCorp to reduce its workforce by 18 percent.
“This is a difficult day for our employees and our company,” said PotashCorp President and Chief Executive Officer Bill Doyle. “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.”
Potash production will be suspended at one of two Lanigan mills by year's end, reduced at the Cory facility and ceased altogether at the Penobsquis, New Brunswick mine. This move is expected to increase production flexibility in the future and will allow for 2014 production in the 10 million tonne range.
But it is not just the potash segment that is experiencing cutbacks. PotashCorp plans to close their Suwannee River plant in the second half of 2014, impacting 350 employees. Nitrogen segment cutbacks in the U.S. and Trinidad will trim 20 permanent positions from the payroll.
The cutbacks are expected to result in lower per-tonne operating costs, especially in the potash and phosphate segments but will cost $70 million in severance packages and may include a write-down of affected assets.
“We work in a remarkable and critically important industry – one with a proud history and a bright future,” said Doyle. “While these are difficult decisions, we know that they help ensure our company remains positioned for the future and able to grow long-term value for those who depend on our sustainability and success.”