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SOMBA K'E/YELLOWKNIFE - De Beers Canada eliminated 128 employees from its Snap Lake Diamond Mine Tuesday, with management spending the day pulling those on the job aside and calling those on an off-rotation at home with the bad news.

Of the 128 lost jobs, 16 belonged to Northerners and out of those, 13 to Yellowknifers. Training and apprenticeship positions are not being cut.

However, in addition to cut De Beers jobs, the company also decided to scale back or "indefinitely suspend" a number of its Northern contractors, said Cathie Bolstad, spokesperson for De Beers Canada.

"The result of that is we estimate another 90 contractor employees will be impacted by job loss," said Bolstad.

The massive job terminations come in the wake of cost-cutting measures implemented by the company in attempts to deal with a significantly reduced market demand for diamonds.

The current slowdown in diamond retail sales means cutters and polishers are having trouble getting diamonds out of the factory and, as a result, are not buying from the mines, like De Beers.

"When times are tough and the global economy is in trouble, people spend less money. And when people spend less money, they typically slow their spending ... on luxury goods (like diamonds) first," said Bolstad.

In the last quarter of 2008, De Beers Canada reduced its capital spending budget by $40 million at Snap Lake and ended its contract with contractor Procon Mining and Tunnelling, which provided 105 contract workers to Snap Lake. It later announced it would shut down Snap Lake for 10 weeks in 2009.

"(With) all of those were measures we were taking with input from our employees on how to manage ourselves through this temporary economic downturn, while avoiding job losses for our employees," said Bolstad.

"The end result of our decision today is those measures are no longer enough," she added.

Bolstad said the company has scaled back production once again to weather the economic storm - decreasing the mine's employee base to 329 - and to align with demand for diamonds with their client base, cutters and polishers. The resulting company restructuring means the cut jobs have, essentially, vanished.

"A lay off is when you issue a company notice that (employees) are not required for a period of time and then you're going to call them back. A termination is a declaration of a job redundancy, the job no longer exists," explained Bolstad.

"That's what we've done ... because when you reduce production and you amalgamate job sets into a reduced number of positions you have a number that becomes redundant," she added.

Bolstad said De Beers Canada has put together termination packages exceeding legislative requirements "to make sure we help (employees) land on their feet and transition themselves to other employment."

Employees with certain skill sets are being offered positions within De Beers Canada, outside of its Snap Lake operations and Bolstad said a "significant portion" of the employees offered job transfers have already accepted.

Bolstad also said while a number of the De Beers lost jobs at Snap Lake belong to employees living outside of Yellowknife, a lost job is still a lost job.

"From our viewpoint ... regardless of where an employee resides a job loss is devastating," she said.

Nonetheless, 13 lost jobs is a hit for Yellowknife, said Ellie Sasseville, executive director of the Yellowknife Chamber of Commerce.

"The reality is that's 13 residents who will now be looking for new jobs," she said.

While Sasseville said "any is too many" as far as job cuts, she does acknowledge it could have been worse for Yellowknife.

"It could have been 128 Yellowknife employees," she said, adding it's also important to consider the lost jobs De Beers contractors are facing.

Sasseville hopes the cuts won't drive people out of the North.

"We hope they will find alternate jobs in Yellowknife and remain in the North," she said.

De Beers, for its part, at least, doesn't plan to leave the North any time soon.

"It's important for people in the Northwest Territories to know De Beers is committed to the NWT and its Canadian projects. Our company has survived world wars (and) recessions before, the actions we're taking are very strategic to position us for a strong future," said Bolstad.