Statoil, Norway’s biggest company, launched another effort to reduce staffing on Tuesday when it offered severance packages to everyone in the company. Statoil aims to cut its workforce by as many as 1,500 full-time-equivalent positions by the end of next year.
Newspaper Stavanger Aftenblad was the first to report on the surprise announcement to employees Tuesday morning. In a notice posted on the company’s own internal communications system, Statoil offered another round of incentives to get people to quit voluntarily.
Employees with up to five years of seniority in the company are being offered nine months of full pay if their applications for a severance package are approved. Those with between six and 10 years’ seniority who are willing to quit can apply for 12 months of pay, those with 11 to 15 years who quit can get 15 months and 16 to 20 years of seniority can yield 18 months of full severance pay. Those who have worked for Statoil for 21 years or more have been offered 24 months of pay if their applications for severance are accepted.
Never done this before
It’s the first time Statoil, faced with less work to offer because of the dive in oil prices, has ever offered severance packages company-wide, instead of just in specific areas of the company.
“It’s important for us to reduce staff by using voluntary means,” spokesman Knut Rostad told Dagens Næringsliv (DN). “We believe it is correct to give all employees this possibility.”
The unusual voluntary severance incentives are part of the latest round of staff reduction efforts at Statoil. “Earlier this autumn we gave various divisions the opportunity to apply for severance packages, early retirement and internal job transfers,” Rostad said. “Now we’re expandng the opportunity.”
Every Statoil employee will be eligible to apply, and each application will be evaluated individually. Statoil currently has around 22,000 employees working in 38 countries around the world, already down from 25,500 in 2013. The goal is to have around 21,000 employees by the end of 2016.
‘Adapting to the situation’
Analyst Christian Yggeseth at Arctic Securities in Oslo told DN that he had expected Statoil to launch at least one more round of job cuts. He thinks offering severance pay to all workers is a “tidy” means of reducing staff and costs.
“Given the number of projects and work to do in the near future, Statoil will become a smaller company,” Yggeseth told DN. “Then there will be a need for fewer employees. They’re just adapting to the situation we have.”
Yggeseth also thinks the company-wide offer is a tactical move by Statoil’s management. “Earlier they offered severance packages to the older employees, which perhaps has led to Statoil losing some core competence that I view as unfortunate,” he told DN. “Many of those who left Statoil have used their competence and are doing well in other companies. Maybe that’s what Statoil wants to avoid now.”