It’s been a bad week so far in the Norwegian oil industry, with at least 3,000 more jobs disappearing as low oil prices force major cutbacks in offshore operations. National Oilwell Varco (NOV) was the latest to inform employees Wednesday morning that 1,500 of them will have to leave the company during the course of the year.
“It was a tough message to get and it became very quiet, that’s understandable,” NOV chief executive Tor Henning Ramfjord told Norwegian Broadcasting (NRK) after announcing the looming layoffs at company meetings that employees had been called into.
No decisions have been made yet, he said, as to exactly who will be laid off at NOV’s offices in Molde, Oslo, Stavanger and Kristiansand. Around 3,000 of NOV’s roughly 5,000 employees work in Kristiansand, though, “so it’s clear that Kristiansand will be hit hard,” Ramfjord said.
He blamed “major changes in the market situation” for NOV’s decision to lay off 900 full-time employees in Norway and most all of the company’s 600 temporary workers who had been hired in for various projects. NOV, headquartered in Houston, Texas, delivers drilling solutions to oil companies, providing rig systems and technology along with a pumps and a wide variety of equipment. Sales have plummeted and orders have dried up, though, as the slowdown in oil exploration and reduced industry investment has greatly reduced demand for NOV’s products and services.
Dag Nordbø, communications chief for NOV, told NRK that after the shock subsided, employees posed “many relevant questions. They wondered when people would have to leave and what criteria was being used during the layoff process, regarding the relation between competence and capacity.”
Not all questions could be answered, but company officials said all four NOV operations in Norway will be affected. “Management understands that staff cuts like this create unease and uncertainty, and that many of our employees can land in a bad situation,” Nordbø said. “We will carry out a clear and thorough process and take care of our obligations to our employees, so that we can try to be a good employer also in this downturn.”
The market uncertainty may mean that more layoffs will be necessary in the longer term. The job losses at NOV follow confirmation this week that Statoil will be laying off up to 1,500 full-time workers plus many hired in on a temporary basis.