Offshore installation and construction specialist Subsea 7 will cut 3000 jobs by 2021, and reduce its active vessel fleet, it said in a statement on Thursday.
Subsea 7 a month ago said that with the deterioration in the outlook for new oil and gas awards, it would "resize" the business to save $400 million in annual cash costs by the second quarter of 2021.
It on Thursday said: "It is envisaged that the overall reduction in headcount would be approximately 3,000 from the global workforce of 12,000, by the end of the second quarter 2021. It is anticipated that 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 and consultation will start soon."
The active fleet of 32 vessels will be reduced by up to 10 vessels through the non-renewal of chartered tonnage and the stacking of owned assets. To remind, the company has earlier this month terminated the charter of the DOF Acergy vessel early.
"It is intended that the reshaping of the fleet would take place over the next 12 months commensurate with the evolution of the Group's workload," Subsea 7 said.
"As previously indicated, these cost reduction measures are expected to deliver approximately $400 million in annualized cash cost savings from the second quarter 2021. In addition, capital expenditures will be reduced to minimal levels in 2021 and 2022," Subsea 7 said.
John Evans, Chief Executive Officer 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. 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."