SNC-Lavalin job cuts not indicative of wider trends in mining: expert

The news coming out of SNC-Lavalin to shed jobs across Canada, including some in Sudburyis disappointing, according to an expert in mining and supply services in the northeastern Ontario city.

The large engineering company announced another round of job cuts Thursday, totaling 405 across Canada,due to the weakness in the mining sector and ongoing efforts to boost its profit margin.

• SNC-Lavalin cutting 405 jobs

Five of those layoffs are in Sudbury, according to a company spokesperson, as SNC-Lavalin will shut down its office in the northeast.

The moves don't come as good news, given how much work the engineering firm does for mining companies in northern Ontario, said Dick Destefano, the executive director of the Sudbury Area Mining Supply and Services Association, but he added thatit's not indicative of a wider problem in the sector.

"So there's been some new technologies appliedthat the companies will look at, and SNC-Lavalin will probably try, through their head office, to maintain it with their employees out in the operational field," he said.

"But no, I don't think this is a trend."

Destefano said other engineering firms are working in the industry in the region, and they've been able to survive the recent downturn, adding that mining companies still have an ongoing need for maintenance and upgrading of small projects.

Declining commodity prices playing a role

Many mining companies in northern Ontario aren't moving forward with major capital projects meaning less of a need for engineering firms like SNC-Lavalinbecause of the low price of commodities, like nickel and copper.

In Thursday's announcement, SNC-Lavalin said continued weakness in the mining sector was a factor in its decision.to shed jobs.

SpokespersonLouis-Antoine Paquin told CBC News in an e-mail that the company employs just over 50 people, with five now being laid off. The rest will work directly with clientsat project sites.

That switch shouldn't be a problem,Destefano said.

"Head office will always be looking for opportunities and if there's people who are here, they're [staying] on standby or in operations," he said.

"They can always transfer them to another project."

In the northeast, SNC-Lavalindoes work for Vale, Glencore, Timmins Gold and Kirkland Lake Gold, among others.