diff --git a/CHANGELOG.md b/CHANGELOG.md
index a9d0a67c..c4dfc9a2 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -9,6 +9,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ### Fixed
 
+- Ignore ical cancelled events when calculating shifts ([#2776](https://github.com/grafana/oncall/pull/2776))
 - Fix Slack acknowledgment reminders by @vadimkerr ([#2769](https://github.com/grafana/oncall/pull/2769))
 - Fix issue with updating "Require resolution note" setting by @Ferril ([#2782](https://github.com/grafana/oncall/pull/2782))
 
diff --git a/engine/apps/schedules/ical_utils.py b/engine/apps/schedules/ical_utils.py
index 8862aa5b..bd467c10 100644
--- a/engine/apps/schedules/ical_utils.py
+++ b/engine/apps/schedules/ical_utils.py
@@ -24,6 +24,8 @@ from apps.schedules.constants import (
     ICAL_LOCATION,
     ICAL_RECURRENCE_ID,
     ICAL_SEQUENCE,
+    ICAL_STATUS,
+    ICAL_STATUS_CANCELLED,
     ICAL_SUMMARY,
     ICAL_UID,
     RE_EVENT_UID_V1,
@@ -200,6 +202,10 @@ def get_shifts_dict(
     result_datetime = []
     result_date = []
     for event in events:
+        status = event.get(ICAL_STATUS)
+        if status == ICAL_STATUS_CANCELLED:
+            # ignore cancelled events
+            continue
         sequence = event.get(ICAL_SEQUENCE)
         recurrence_id = event.get(ICAL_RECURRENCE_ID)
         if recurrence_id:
diff --git a/engine/apps/schedules/tests/test_ical_utils.py b/engine/apps/schedules/tests/test_ical_utils.py
index 39951fef..c6520c96 100644
--- a/engine/apps/schedules/tests/test_ical_utils.py
+++ b/engine/apps/schedules/tests/test_ical_utils.py
@@ -16,7 +16,13 @@ from apps.schedules.ical_utils import (
     parse_event_uid,
     users_in_ical,
 )
-from apps.schedules.models import CustomOnCallShift, OnCallSchedule, OnCallScheduleCalendar, OnCallScheduleWeb
+from apps.schedules.models import (
+    CustomOnCallShift,
+    OnCallSchedule,
+    OnCallScheduleCalendar,
+    OnCallScheduleICal,
+    OnCallScheduleWeb,
+)
 
 
 def test_get_icalendar_tz_or_utc():
@@ -122,6 +128,38 @@ def test_list_users_to_notify_from_ical_viewers_inclusion(
     assert set(users_on_call) == {user}
 
 
+@pytest.mark.django_db
+def test_list_users_to_notify_from_ical_ignore_cancelled(make_organization_and_user, make_schedule):
+    organization, user = make_organization_and_user()
+    now = timezone.now().replace(second=0, microsecond=0)
+    end = now + timezone.timedelta(minutes=30)
+    ical_data = textwrap.dedent(
+        """
+        BEGIN:VCALENDAR
+        VERSION:2.0
+        CALSCALE:GREGORIAN
+        METHOD:PUBLISH
+        BEGIN:VEVENT
+        SUMMARY:{}
+        DTSTART;VALUE=DATE-TIME:{}
+        DTEND;VALUE=DATE-TIME:{}
+        DTSTAMP;VALUE=DATE-TIME:20230807T001508Z
+        UID:some-uid
+        LOCATION:primary
+        STATUS:CANCELLED
+        END:VEVENT
+        END:VCALENDAR
+    """.format(
+            user.username, now.strftime("%Y%m%dT%H%M%SZ"), end.strftime("%Y%m%dT%H%M%SZ")
+        )
+    )
+    schedule = make_schedule(organization, schedule_class=OnCallScheduleICal, cached_ical_file_primary=ical_data)
+
+    # get users on-call
+    users_on_call = list_users_to_notify_from_ical(schedule, now + timezone.timedelta(minutes=5))
+    assert len(users_on_call) == 0
+
+
 @pytest.mark.django_db
 def test_list_users_to_notify_from_ical_until_terminated_event(
     make_organization_and_user, make_user_for_organization, make_schedule, make_on_call_shift