Norway’s major oil service and engineering company Aker Solutions warned Friday that it likely will need to cut another 900 jobs, because of ongoing shrinkage in its workload. The cuts will affect divisions in several Norwegian cities from north to south.
Aker Solutions, based in Oslo, has been cutting jobs for months, with around 1,300 full- and part-time positions eliminated since July 2014. The cuts have been made in response to the reluctance by Aker’s oil company customers to embark on new projects and invest in ongoing ones. The dive in oil prices that began last year continued this week, fueling more trauma in the oil, oil service and offshore industry.
“As everyone knows, we now have an extremely demanding and unpredictable oil service market, especially within maintenance, modifications and operations (MMO),” the communications director for Aker Solutions, Bunny Nooryani, told Norwegian Broadcasting (NRK) on Friday. She cited the decline in investment on the Norwegian Continental Shelf and less work from the oil companies. “We have seen that because of the lack of work, we need to adjust our capacity,” Nooryani added.
The new round of job cuts will affect Aker Solutions MMO divisions in Stavanger, Bergen, Kristiansund, Trondheim, Tromsø and Sandnessjøen, as well as at offshore installations. The cutbacks, caused by a “repositioning” and “streamlining” of its MMO business, threaten as many as 900 full-time jobs spread over all the divisions.
“These measures are painful but necessary to strengthen the competitiveness and longer term potential of our Norwegian MMO business,” Aker Solutions’ CEO, Luis Araujo, said in a press statement. He noted that the business in Norway had “suffered from a sharp drop in activity” in the country’s offshore services market.
Operations in Tromsø will be hit especially hard, with Aker Solutions confirming that its office handling maintenance and modifications work from the northern Norwegian city will be shut down. Some Aker employees will retain their jobs in Tromsø, however, as part of the company’s Arctic operations.
When the Tromsø office was established in 2011, Aker Solutions predicted it could employ as many as 300 people. The abrupt turn in the market caused by the dive in oil prices from well over USD 100 to less than USD 30 this week shows just how quickly things can change.
Aker Solutions has secured some new work but also lost a major long-term contract with Statoil just before Christmas. That loss will affect the company’s work volume later this year. The company currently has around 16,000 employees in 20 countries. Around 5,000 still work within MMO, around 3,600 of them in Norway.