Subsea 7 – the global offshore oil and gas services provider – has today announced that it is cutting more than 400 jobs in the UK, most of them in Aberdeen.
Overall, the company plans to axe 1,200 roles worldwide out of a total workforce of 9,200. These latest lay-offs are in addition to 400 redundancies it announced in May last year.
As part of its global resizing and cost reduction measures, Subsea 7 told its staff in Aberdeen, Glasgow and London that it will be entering a formal consultation as the business aims to reduce its UK workforce by up to 430 people by March 2017.
Phil Simons, Vice-President, UK & Canada, said: “Today’s difficult decision is a regrettable consequence of the prolonged and challenging environment the oil and gas supply chain is now experiencing, particularly in the north-east of Scotland.
“Unfortunately, the rapid decline in project awards, increased cost pressures and market unpredictability, necessitates further streamlining of our structure and processes to protect our business and the skilled services we provide.
“I understand the dramatic impact these changes will have on our workforce and their families. I wish to reassure them that we will do all we can to support them through this process, to ensure they are treated with respect, compassion and sensitivity during this difficult time.
“Every effort will be made to limit the number of compulsory redundancies.”
These cost reduction and resizing measures, together with those already initiated since the start of the year, are expected to deliver approximately $350 million in annualised cost savings going forward, for a one-off implementation cost of ‘less than’ $100 million.
Subsea 7’s fleet of active vessels will be managed commensurate with the projected workload, while retaining capability and maintaining a global presence.
Meanwhile, with effect from 1 July, the Subsea 7 Group will change the structure of its organisation. The new organisational and reporting segments will comprise: – SURF and Conventional, – i-Tech Services and – Corporate (including Renewables and Heavy-lift).
This will replace the ‘Southern Hemisphere and Global Projects’ and ‘Northern Hemisphere and Life of Field’ Business Units.
Under the new organisational structure John Evans, Chief Operating Officer, and Øyvind Mikaelsen, appointed Executive Vice President – Commercial, will report to Jean Cahuzac, Chief Executive Officer. Steve Wisely will be appointed Senior Vice President i-Tech Services, reporting to John Evans.
A spokesman added: “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. We remain confident in the long-term future for deepwater oil and gas production.”