The Norwegian subsea services company announced on Wednesday it would be undertaking a second phase of global resizing and cost reduction prompted by “continuing difficult business and economic conditions in the oil and gas market”.
Subsea 7 said would be reduced its global workforce to 8,000 by early 2017 from 9,200 at present. The company has already shed 600 jobs this year having started out 2016 with a workforce of 9,800. By early 2017 Subsea 7 will have cut over 39% of its global workforce, some 5,400, from the end of 2014 when it employed 13,800 people.
It said that consultation with employees and employee representatives would take place on a local basis and that process had already begun in Norway and the UK.
In addition Subsea 7 said five more vessels would leave its active fleet by early 2017 based on stacking owned vessels and returning chartered vessels when existing contracts expire.
The company said the latest staff and fleet cuts would deliver cost savings of $350m a year, while the charge relating to the restructuring recognised in 2016 was expected to be less than $100m.
Despite cutting 39% of its workforce in just under two years Jean Cahuzac, ceo of Subsea 7, claimed they remained confident about the long-term future for deepwater oil and gas production.
“We are committed to retaining our core capabilities and developing our leading market position through a strategy focused on differentiation delivered by our people, assets and technology.”
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