Subsea 7 has confirmed that it is reducing its workforce by 2500, to save US$400 million.
The confirmation came as the firm reported a major slide in revenue for the first half the year.
The company recorded US$2534 million in revenue this year compared to last year’s US$3573 million, according to its financial reports.
Chief executive Jean Cahuzac said the firm would save a further US$150 million by cutting its fleet by 12 vessels.
He said: “During the quarter Subsea 7 announced a cost reduction programme to resize the fleet and workforce in line with the declining workload. A US$100 million charge related to the resizing was recognised in the second quarter, out of an estimated total charge of US$140 million. The Group will reduce its capacity by 2500 people and 12 vessels by early 2016, delivering expected annualised savings of approximately US$400 million in employee related costs and about US$150 million in vessel costs.
“Second quarter revenue of US$1352 million was down US$553 million on the prior year quarter, reflecting the difficult industry conditions and declining workload.
“Global vessel utilisation increased to 82% in the second quarter from 68% in the prior quarter as the offshore phase of several projects progressed significantly and activity in the North Sea increased in part due to the seasonally better weather.
“Order intake was US$0.9 billion reflecting Subsea 7’s competitiveness in a market that remained subdued.”
The company’s activities
The company, which specialises in subsea construction for the oil and gas industries, maintained its guidance that revenue will be significantly lower in 2015 than in the year earlier and that margins will decrease.
Edited from various sources by Elizabeth Corner
Sources: Energy Voice, Economic Times, MarketWatch