Dutch marine engineering firm Fugro will lay off hundreds of workers in the coming quarters. The company is trying to keep its expenses at bay due to a deteriorating market situation in the oil and gas market, caused by low oil prices.
The oil and gas market makes up an estimated 78 percent of Fugro’s business. The news of further workforce reduction was revealed by the company on Friday during its third quarter results presentation. The company said that five hundred workers will be let go in the coming quarters.
This is in addition to 1.050 employees, both onshore and offshore, already let go so far this year. In total, Fugro employs approximately 12,500 employees in over seventy countries.
Fleet cut too
The company is also reducing its vessel fleet. Year-to-date, the geotechnical fleet has been reduced from 11 to 7 vessels. In the Survey division, the target of a fleet reduction by 10-15% in 2015 was achieved in the third quarter. The division can still retire several older vessels at short notice, if required, Fugro said.
The Subsea Services division has reduced its fleet by 2 long-term charters, of which 1 was an early termination.
The company reported the third quarter 2015 revenue of 610 million euros, a 13.2% decline, compared to the third quarter of 2014.
Due to the deteriorated market outlook Fugro said it expected non-cash impairments in the range of EUR 250 to 300 million in the fourth quarter, mainly related to the Subsea Services division.
Paul van Riel, CEO said: “We have made good progress with the implementation of our management agenda: focus on profitability, cash flow and strengthening of the balance sheet. The implementation of the cost reduction and performance improvement measures is progressing ahead of schedule.
He added: “With our clients further reducing their E&P spend, visibility is low. We expect the coming quarters to be difficult with pressure both on activity levels and pricing, and we will continue to manage through the downturn by adjusting our resources and costs in line with activity levels.”
Offshore Energy Today Staff