Barrick Gold Corp. will lay off about 30 percent of corporate staff at its headquarters in Toronto and in other offices in a downsizing plan triggered by problems at major mines and a drop in the price of gold.
Barrick and rival gold miners such as Newmont Mining and Newcrest Mining are shaking up operations, halting projects, slashing exploration spending and cutting jobs as the industry struggles with high costs and weak metal prices.
Barrick, the world's largest gold producer, confirmed on Monday a Reuters report that the layoffs were coming and said the cuts were part of an effort to "streamline the organization and manage costs in a challenging business environment".
Barrick said it is eliminating about 100 office positions, most of them at its home base in Toronto. The company will also cut jobs at a number of its regional offices as part of a company-wide effort.
Chief Executive Jamie Sokalsky announced the cuts at a town hall meeting with staff in Toronto last week, sources familiar with the situation told Reuters on Sunday.
The sources, who asked not to be named as they were not authorized to speak about the matter, said the cuts in Toronto were to begin on Monday and will be completed before the end of the week. Cuts in Vancouver and other offices could drag into July.
Barrick has about 400 corporate staff, about 300 of them in Toronto.
The sources said Sokalsky, a long-time Barrick hand who took over as CEO barely a year ago, was visibly emotional during the mid-week town hall meeting with employees. He declined to take questions and informed staff that their direct managers would respond to their questions.
Shares in Barrick, which have more than halved in value over the course of the last year, were down 4.3 percent at C$16.95 early on Monday afternoon as the price of gold fell about 1 percent following last week's 7 percent decline.
Spot gold, which peaked at more than $1,900 an ounce in late 2011, was trading at $1,285 an ounce at 1630 GMT on Monday, not far from a near three-year low touched last week.
One source said Barrick's latest job cuts were part of a broad cost-cutting initiative announced earlier this year, and not a knee-jerk reaction to declines in the price of gold.
In addition to pressure from the gold price, Barrick faces operational and regulatory issues at some mines and projects.
Chile last month fined Barrick and ordered it to halt all work at its massive Pascua-Lama project, on the border of Chile and Argentina, due to environmental violations. That was just the latest setback for the project, where capital costs have mushroomed over the last year.
The company has also faced setbacks at its copper mines in Zambia and Saudi Arabia, and has halted work on a number of projects in other parts of the world.
Barrick, which employs roughly 25,000 people, is also cutting jobs at a number of mines. Last week, it said it was cutting 60 to 65 jobs at its U.S. operations after earlier this month announcing a few dozen cuts in Australia.
Many of Barrick's competitors are taking similar actions.
Newmont said earlier this month it would cut its workforce at its home base in Denver, Colorado, by at least 33 percent over the next three months. And Australian gold miner Newcrest said it would write down its asset values by about $6 billion.
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