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Subsea 7 axes 3,600 staff in 2015, $512m goodwill writedown

Subsea 7 axes 3,600 staff in 2015, $512m goodwill writedown
Subsea 7 has been hit by $657m in writedowns in Q4 and axed 3,600 from its workforce last year.

Announcing a net loss of $421m for the fourth quarter of 2015 Subsea 7 revealed that it reduced its workforce to 9,800 people from 13,400, well above the 2,500 planned job cuts announced in May 2015. The company removed 13 vessels from the active fleet by end February, and further chartered vessel will be returned by the end of Q1 2016.

The staff cuts resulted in a restructuring charge of $136m, which Subsea 7 said was “broadly offset by cost savings in the same period”.

Meanwhile the company was hit by hefty impairment charges in Q4 related to goodwill and vessel values. “Net operating loss of $415m included a goodwill impairment charge of $521m and a $96m impairment charge relating to vessels and equipment,” it said.

Looking ahead the company said: “The low oil and gas price continues to depress industry activity as clients delay and cancel new projects; the timing of market recovery remains highly uncertain. As guided previously, revenue and adjusted EBITDA percentage margin are expected to be significantly lower in 2016 compared to 2015.”