(Reuters) — About 1,000 construction workers employed by a contractor at Husky Energy Inc's Sunrise oilsands project were laid off unexpectedly on Wednesday, a union official confirmed.
Izzy Huygen, a Fort McMurray, Alta., representative of the Christian Labour Association of Canada, said many of the workers had expected their jobs to last until summer but were informed of the layoffs on Wednesday morning.
"Guys were just notified this morning as they woke up in camp," Huygen said.
"They were supposed to be there until June, July and August. It was supposed to be a gradual decline through the summer, so this was unexpected."
The workers were employed by Saipem SpA's Canadian unit, which could not immediately be reached for comment. However, Husky spokesman Mel Duvall confirmed that Saipem's work has wrapped up at the site 60 km northeast of Fort McMurray and any remaining work at the site will be handled by the company and other contractors.
The layoff is among the largest yet seen from companies operating in Alberta's oilsands, as oil prices that have dropped more than half since June squeeze profits and force operators to slash capital spending and new projects.
Suncor Energy said in January that it would cut 1,000 employees and contractors, while Royal Dutch Shell is cutting about 300 from its oilsands operation.
Husky said on Wednesday that oil production had begun at the $3.2-billion Sunrise project, which is co-owned by BP Plc .