Barrick Gold Corp.’s chief executive officer says the gold-mining sector needs more merger activity to capitalize on the cost savings that come from closing head offices and cutting staff.
Mark Bristow helped kick start a wave of deal making in the industry last year when his Africa-focused Randgold Resources Ltd. agreed to be sold to Barrick for US$6-billion. A few months later, Newmont Mining Corp. announced it would acquire Goldcorp Inc. for US$10-billion, creating the world’s largest gold mining company. Barrick and Newmont also agreed this year to combine some operations in Nevada in order to reduce costs.
Now, he says, the time has come for more deals and more job cuts at gold companies. Under Mr. Bristow, Randgold was known for employing a skeleton crew at its head office.
Barrick, now the world’s second-biggest gold miner, is following the same model. One of his first orders of business was to issue layoff notices to about 95 people at the Toronto head office, bringing the head count down to about 65, and consolidating the entire staff on just one floor.
“In this modern world, there’s no logic to having big corporate offices. We’ve proved that’s possible at Randgold, and very quickly in just nine months at Barrick,“ Mr. Bristow said after the release of the company’s third-quarter results.
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