Subsea 7, the Norwegian-owned offshore firm that specializes in underwater seabed-to-surface engineering and construction services, is poised to lay off another 1,200 employees. The jobs cuts have already started in Norway and Great Britain, and will be felt at Subsea 7 operations worldwide.
Dagens Næringsliv (DN) reported Wednesday that as many as five vessels will be taken out of Subsea 7’s fleet by early next year. The company blamed hard times in the oil and gas market, which has sharply reduced demand for Subsea 7’s delivery of engineering, contracting, project and vessel management services.
Kristian Siem, the London-based Norwegian who is Subsea 7’s chairman and major shareholder, thinks the downturn in the oil service branch will continue for several more years. He hasn’t shared the optimism of other industry colleagues who think the market is already improving.
“I think this downturn will be deep and long … that’s what we’re preparing ourselves for,” Siem told DN earlier this year. He added that the company was “less-concerned about 2016 than 2017.”
The cost cutting is “necessary,” according to Subsea 7 chief executive Jean Cahuzac. The company stated in a press release issued Wednesday (external link) that Subsea 7 will be left with 8,000 employees on a global basis after the cuts have been made. Cahuza said that Subsea 7’s new organization would reflect a focus on commercial and long-term strategic priorities, as the company adjusts to a lower level of activity.
Stig Roar Rødne, who represents employees at Subsea 7 in Norway, told Norwegian Broadcasting (NRK) that around 260 employees working in Norway would be losing their jobs. He said the company was considering shutting down its divisions in Oslo and Grimstad on Norway’s southern coast.