Norwegian marine seismic contractor MultiClient Geophysical is cutting worker’s wages, aiming to slash the overall costs.
The company has reduced employee compensation by close to 30% compared to 2015 levels. The cost saving exercise has been carried out through voluntary salary reductions and / or reduced working hours, the company said on Friday. The company said it was cutting cost to further improve the its position in a challenging market environment.
The estimated annual run rate of the cost savings is approximately $0.8 million relative to the 2015 level, of which most will be effective per July 1, 2016.
Further, and as agreed by the Annual General Meeting in May, the Board of Directors and Nomination committee fees are reduced by 20% compared to 2015. This reduction comes in addition to the savings in operating expenses reported as of Q1 2016.
“The current cost saving exercise demonstrates the flexible business model of MCG and the company’s ability to scale the operating and investment levels in a turbulent market,” MultiClient Geophysical said.
The seismic market has been negatively affected by low oil price, and cuts in spending by the oil companies. MultiClient Geophysical in a report in May said it expected that the oil companies would continue their cost discipline, leading to the low demand for seismic data throughout 2016.