Subsea 7 to lay off quarter of its workforce
The slump in the oil and gas market is taking its toll on Subsea 7. The offshore service provider plans to reduce its workforce of 12,000 by approximately 3000 by the end of the second quarter of 2021. The active fleet of 32 vessels will be reduced by up to 10 vessels.
‘Faced with a significant deterioration in the oil and gas market, we are taking swift and decisive action to address the elements under our control,’ says John Evans, Chief Executive Officer. ‘These measures to reduce our cost base will help preserve cash and protect our balance sheet strength, while maintaining our strong competitive position in core markets.’
Two-thirds of the job cuts are expected to affect the non-permanent workforce and one-third the permanent employees. Discussions with employee representatives will take place on a local basis and consultation will start soon.
The fleet will be reduced through the non-renewal of chartered tonnage and the stacking of owned assets. It is intended that the reshaping of the fleet would take place over the next twelve months commensurate with the evolution of the Group’s workload.
The cost reduction measures are expected to deliver approximately 400 million US dollars in annualised cash cost savings from the second quarter 2021. In addition, capital expenditures will be reduced to minimal levels in 2021 and 2022.
Picture by Subsea 7.