Alaska’s largest private-sector employer, Arctic Slope Regional Corp., has laid off employees and cut charitable giving due to the collapse in oil prices and the economic shutdown caused by the global coronavirus pandemic.
That’s according to an April 3 letter from the chairman of ASRC’s board of directors, Crawford Patkotak, to the company’s 13,000 shareholders. An ASRC spokesman would not say how many employees were let go.
Get the latest coverage of the coronavirus in Alaska
ASRC’s letter to shareholders said the corporation had cut “many of the charitable programs in our region,” eliminated all corporate bonuses and incentives for executives, and reduced the board of directors’ compensation — in the form of a stipend — by 30 percent.
“It’s a challenging time for a lot of businesses right now, and let’s hope we can all weather the storm and get back to a new normal soon,” ASRC spokesman Ty Hardt wrote in an email.
Hardt declined to answer any further questions about the cuts.
RELATED: North Slope Borough ‘commandeers’ Ravn’s North Slope assets
“Unfortunately, the total impact of the COVID-19 response (and low oil prices) isn’t quite known yet and it could get worse before it gets better,” Hardt wrote, referencing the disease caused by the coronavirus.
Hardt said ASRC has 15,000-plus employees in Alaska and the Lower 48, and in its most recent available annual report, from 2018, it reported revenues of more than $3 billion. The Alaska Native corporation is heavily invested in oil and gas, including ownership of an oil refining business, and represents residents and descendants of Iñupiat communities on Alaska’s North Slope, from Point Hope to Kaktovik.
RELATED: Longstanding tensions underlie Arctic Slope Regional Corporation’s withdrawal from AFN
ASRC paid out dividends of $7,000 to each shareholder with 100 shares in 2018, according to its report for that year.
In its letter to shareholders this month, ASRC said it was cutting spending in areas that were not generating revenue the corporation needs to pay shareholder dividends.
“In 2020, it is likely we will have to decrease the amount of the ASRC dividend disbursements, but we do not yet know by how much or for how long,” the letter says.
The letter says ASRC will continue plans to expand into the Lower 48 and diversify its investments away from oil and gas.
Commenters on a private Facebook group for ASRC shareholders had mixed responses. Some felt the corporation’s board was too highly compensated and had not done enough to cut at its higher levels of management. A few vowed to vote out the current board members.
RELATED: Due to revenue drop, Anchorage Daily News cuts pay, lays off 7
Others thanked the board for making difficult decisions to keep the corporation afloat during tough economic times.
One commenter indicated the layoffs had affected employees that were also shareholders, including the commenter’s son.
Alaska’s Energy Desk reporter Nat Herz contributed reporting to this story.