Oil services firm Subsea 7 announced May 28 that it will cut its global workforce by a quarter and reduce its fleet of specialized vessels by up to a third to preserve cash following the slump in the oil market.
The company said it planned to lay off about 3,000 workers, both contractors and permanent employees, by the end of second-quarter 2021. The company has operations in about 30 countries but did not say where jobs would be cut.
Oil companies have reduced spending on new projects after oil prices hit decade lows earlier this year due to excess supply as travel and other restrictions imposed to contain the coronavirus pandemic slashed demand for fossil fuels.
“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,” Subsea 7’s Chief Executive John Evans said in a statement.
The London-headquartered company is controlled by Norwegian investor Kristian Siem, its chairman, and is listed in Oslo.
The company also said it would also reduce its fleet of 32 vessels—which lay pipes, lift heavy loads and launch ROVs among other tasks—by up to 10 vessels.
Subsea 7, which employs 12,000 people globally, said the measures are expected to result in about $400 million in annualized cash cost savings from the second quarter of 2021.
The company, which made an adjusted core profit (EBITDA) of $631 million in 2019, will also reduce its capital spending to minimal levels in 2021 and 2022, it added.
Recommended Reading
Artificial Lift Firm Flowco’s Stock Surges 23% in First-Day Trading
2025-01-22 - Shares for artificial lift specialist Flowco Holdings spiked 23% in their first day of trading. Flowco CEO Joe Bob Edwards told Hart Energy that the durability of artificial lift and production optimization stands out in the OFS space.
Chevron Targets Up to $8B in Free Cash Flow Growth Next Year, CEO Says
2025-01-08 - The No. 2 U.S. oil producer expects results to benefit from the start of new or expanded oil production projects in Kazakhstan, U.S. shale and the offshore U.S. Gulf of Mexico.
BP Cuts Renewable Investment, Boosts Oil and Gas in Strategy Shift
2025-02-26 - BP aims to grow oil and gas production to between 2.3 MMboe/d and 2.5 MMboe/d in 2030.
Not Sweating DeepSeek: Exxon, Chevron Plow Ahead on Data Center Power
2025-02-02 - The launch of the energy-efficient DeepSeek chatbot roiled tech and power markets in late January. But supermajors Exxon Mobil and Chevron continue to field intense demand for data-center power supply, driven by AI technology customers.
The Private Equity Puzzle: Rebuilding Portfolios After M&A Craze
2025-01-28 - In the Haynesville, Delaware and Utica, Post Oak Energy Capital is supporting companies determined to make a profitable footprint.