Norwegian geophysical services company Electromagnetic Geoservices (EMGS) will reduce its global headcount by 15 percent in an effort to cut costs in line with the level of expected activity.
The geophysical company said on Thursday it would implement several structural changes to the organisation, including centralising and / or merging departments, in addition to other measures to reduce cost.
According to EMGS, these changes will result in a reduction of the global headcount by about 15%, and the company expects to book restructuring charges of approximately $0.7 million in the second quarter of 2016.
The company further added that the additional cost measures would be implemented immediately and yield effects gradually, and were expected to further reduce the annual cost base by approximately $10 million.
Christiaan Vermeijden, CEO of EMGS, said: “Whilst the interest in our technology continues to be high, our customers are delaying, cancelling or reducing work scopes, resulting in a lower demand for our services. Therefore, we continue to focus on cost control and cash flow, and implement changes to increase the efficiency of the organisation.”
Like many of its peers, EMGS was also affected by low oil price and reduction in activity. In order to adapt to the challenging market conditions, the company in June 2015 announced cost reduction measures including a reduction of the company’s global headcount including consultants by 20% and a reduction of the vessel capacity by one vessel (from four to three).
EMGS made further cuts in September that were meant to reduce the annual operational cost level by around $35 million, or $70 million in total when taking the previously announced measures into account.
Offshore Energy Today Staff