Over the next 12 months, Oslo-listed Subsea 7 SA said it would reduce its workforce by 25% and reshape its fleet in an effort to deliver annualised cost savings of about US$400M
The moves are being made as part of the cost reduction programme in the current low oil price environment.
Subsea 7 said the overall reduction in headcount would be approximately 3,000 from the global workforce of 12,000 by the end of Q2 2021. Two-thirds of the reduction would affect the non-permanent workforce and one-third of the reduction would affect permanent employees. Discussions with employee representatives will take place on a local basis, said Subsea 7.
The group’s active fleet of 32 vessels will also be reduced by up to 10 vessels through the non-renewal of chartered tonnage and stacking owned assets. Reshaping the fleet will take place over the next 12 months in line with Subsea 7’s workload.
These cost reduction measures are expected to deliver approximately US$400M in annualised cash cost savings from Q2 2021. Additionally, Subsea 7 will reduce capital expenditure to ‘minimal levels’ in 2021 and 2022.
Subsea 7 chief executive John Evans said "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." Added Mr Evans, "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."
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