Van Oord to cut 500 jobs, 120 in the Netherlands
Covid-19 and the slump in oil and gas prices are also taking their toll on Dutch offshore and dredging contractor Van Oord. The company says it needs to restructure to stay healthy, which will cost 500 jobs, of which 120 in the Netherlands. In addition, Van Oord seeks to operate a smaller, more modern dredging fleet.
Van Oord says ‘market conditions in the dredging industry are under pressure and the volatility in oil and gas prices also triggers a decrease of offshore field services. Consequently, we face a decline in our turnover and a deterioration of our results.’
The company says it has to adapt ‘to this new reality’, which will cost 500 jobs globally. 120 employees in the Netherlands will lose their jobs in a collective redundancy plan. The Works Council has been asked for advice and Van Oord will start consultation with the Dutch unions. At the end of last year, the company employed over 5200 FTE.
Van Oord’s spokesman Robert de Bruin says the restructuring will impact the organisation as a whole, from its foreign offices and Dutch headquarters to its fleet and across all segments the company operates in. Likewise, the job cuts will impact employees in all types of positions, from office staff to crews. De Bruin stresses sailing personnel will not be hit harder than shore-based staff.
Fleet and company portfolio
When it comes to the fleet, De Bruin will not say whether or which ships will be laid up or sold, but once again stresses the impact will be felt across the organisation. He does say the company wants ‘to speed up the modernisation of its fleet, particularly in dredging. We are seeking to desinvest, to be able to operate with a smaller, more modern fleet. Basically, we want a smaller fleet with the same production quality.’
When asked whether the company will change its business portfolio following the restructuring and increase focus on offshore wind for example, De Bruin says this is not the case. ‘Of course, offshore wind is still continuing well, with dredging being hit hardest and hydraulic engineering and the oil and gas sector struggling as well. However, we have made a conscious choice within Van Oord to focus on four business units: dredging (global); dredging, hydraulic engineering and infrastructure projects in the Netherlands; oil and gas; and offshore wind. The focus may shift somewhat within some of these segments, but our strategy is to continue this portfolio.’
Van Oord joins a rapidly growing list of offshore contractors to announce workforce reductions. Subsea 7 recently announced it will dismiss 3000 employees, which is a quarter of the company’s total workforce. However, subsidiary Seaway Heavy Lifting will not be affected by the cost reductions. Allseas last week announced it will lay off 300 employees on board and send several vessels into cold lay-up.
The coronavirus has caused a new crisis in the oil and gas markets. Analysts have said this crisis could be worse than the crude price collapse in 2014.
- Offshore contractor Allseas to significantly cut crew headcount
- Subsea 7 to lay off quarter of its workforce
- Seaway Heavy Lifting not impacted by cost reductions at Subsea 7
Picture by Frans Berkelaar.