Offshore service vessel operator Subsea 7 is to make a second round of downsizing across its global operations and will reorganise its corporate structure in response to “continued difficult business and economic conditions in the oil and gas market”.
The Oslo-listed company will cut around 1,200 jobs in Norway and the UK by early 2017, reducing its global headcount to around 8,000 employees.
“The reduction in the size of our workforce is a necessary step to maintain our competitiveness and protect our core offering through the oil price cycle,” Jean Cahuzac, Subsea 7’s CEO, said in a release.
Up to five vessels are scheduled to leave Subsea 7’s current active fleet by early 2017. Owned vessels will be stacked and chartered vessels will be redelivered to their owners when their existing contracts expire, the company said, but did not specify which vessels.
These measures, plus those initiated at the start of 2016, are expected to deliver annualised cost savings of $350m, Subsea 7 said. The charge related to the resizing is expected to be less than $100m in 2016.
From July 1, the structure of the company will also change. The existing Southern Hemisphere and Global Projects and Northern Hemisphere & Life of Field business units will be replaced by new organisational segments named SURF and Conventional; i-Tech Services, and Corporate (which includes the company’s renewables and heavy-lift buisiness).
“Our new organisational structure reflects our focus on commercial and long-term strategic priorities as we adapt to the present low levels of activity and drive more efficient ways of working with our clients,” Cahuzac said.
“We remain confident in 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,” he added.