De Beers to move some Yellowknife, Snap Lake jobs to Calgary

De Beers Canada is moving some Yellowknife jobs to a new office in Calgary, and may be cutting other Northern positions.

The company shared its Canada-wide restructuring plan with employees earlier this week, says Tom Ormsby, a De Beers Canada spokesperson.

"It's a very small number compared to the total workforce that we will eventually be, but there will be reductions," says Ormsby of the overall plan.

In N.W.T., the plan affects office workers at both the De Beers office in downtown Yellowknife, as well as the company's Snap Lake mine, located 220 kilometres northeast of the city, though De Beers did not clarify how many jobs at either location are being moved or eliminated.

"We don't have those kind of numbers to say, 'This is exactly what's going to happen,'" says Ormsby.

De Beers is centralizing much of its Canada-based office staff in a new Calgary headquarters scheduled to open in June. It's trying to trim costs in response to what it's calling "a downturn in the diamond market."

In the company's latest report on the diamond industry, released last month, it said "rough diamond demand is likely to be lower in 2015" due to a glut of rough diamonds.

'Every person who sits at the mine costs extra money'

De Beers did consider putting its new headquarters in Yellowknife, says Ormsby, but itlooked at a slew of factors, such as the company's exploration work throughout Canada, including Ontario, where the company is trying to extend the life of its Victor mine, set to run out of ore in 2018.

Ormsby says Yellowknife may be close to Snap Lake, which is set to produce diamonds until 2028, and the company's next diamond mine, Gahcho Kue, which is still scheduled to open in the latter half of 2016, but "there's other things for us to consider," he says.

"We certainly had to look at the cost of renting;we had to look at the cost of living for our employees. We look at the ability to hire in certain locations, to retain people. All of that stuff goes into it."

Ormsby says not all people who work at Snap Lake actually need to be at the mine all of the time.

"Every person who sits at the mine costs extra money," he says. "They have a room. They have food. There's travel allowances and camp allowances. And if they're not actually required to do their duties at the mine, is there a more effective way to do this from an economic point?"

De Beers' plan to move workers south comes less than two months after it posted a Snap Lake job ad for underground miners that said residency in Yellowknife was "mandatory."

Asked about the disconnect between that ad and the company's latest plan, Ormsby said, "I can certainly understand that. I think what's important for people to understand is that we still have a commitment to priority hiring in the Northwest Territories. That will not change at all."

Yellowknife workers who decide not to follow their jobs toCalgary will be laid off and given "a more than suitable severance opportunity," says Ormsby.

Chamber of commerce disappointed but not surprised

Mike Bradshaw, executive director of the N.W.T. Chamber of Commerce, says he's disappointed, but not surprised, by De Beers' decision.

"On one hand, from a business standpoint, we completely understand that you've got to restructure from time to time to best and most efficiently accommodate your business needs," he says.

At the same time, "We need to get our cost of living and our cost of operating down in the North. De Beers isn't the first operation that, when given a choice, has decided to shift at least part of its overhead to a lower-cost jurisdiction. We have members that started doing that years ago. They have storefronts here and they have moved their operations elsewhere."

De Beers is also shifting positions to Calgary from the Victor mine, as well from its Timmins, Ont., office and its Toronto headquarters. The Toronto office will close.