UPDATED: Norwegian industrial firm Aker Solutions may need to let around 1,500 contract workers go at its offshore yard in Egersund on Norway’s southwest coast next year. With no new orders coming in from an industry that’s paring back as oil prices fall, there’s no new work yet for the yard’s workers to do.
Aker Solutions insisted that the company isn’t cutting permanent jobs or laying off staff, but rather may need to let people go who have been working on seasonal and project contracts that now are running out.
Aker spokeswoman Anne Cecilie Lund-Andersen claimed the job cuts aren’t equivalent to permanent staff reduction, but rather reflect “usual seasonal swings, not unknown in the industry.”
A local union leader said that around 1,500 people working on the soon-completed Edvard Grieg platform and with Subsea on the Åsgård project this winter don’t have new jobs to go to at Aker. He thinks they’re all likely to be out of work in January.
“When there aren’t more jobs or projects coming into the yard, there’s no work for us to do,” Oddvar Hølland, union leader at Aker Solutions Egersund, told newssite DN.no on Friday. The job cuts may hit the local community hard. Only around 12,000 people live in Egersund.
Hølland said there would only be “small jobs” left at the yard when the company cuts back around New Year. Per Harald Kongeif, head of Aker Solutions in Norway, said in a state released later on Friday, though, that the company is “currently tendering for several new projects for our Egersund yard and we are confident that we will secure new work to maintain a robust activity level also during the last half of 2015.”
The current lack of new projects at the Egersund yard reflects the uncertainty in the oil and gas industry at present, as falling oil prices have made many new exploration and production projects unprofitable. The cost of extracting Norway’s offshore oil has, in some cases, become too high for the projects to be profitable.
As reported earlier, Statoil has been systematically trying to cut costs and has reduced staffing by nearly 2,000 positions in recent months. Several other oil and oil service firms have also been cutting back, with around 7,000 jobs disappearing in the oil sector this year. Many laid-off engineers, however, have quickly found new work in other industries.