Wintershall Dea agrees on job cuts with unions

Following a merger between Wintershall and DEA into a new entity named Wintershall Dea, the German oil and gas giant has decided on the number of job cuts previously announced as part of the integration of two businesses. 

Source: Wintershall Dea

The two companies closed their merger at the beginning of May 2019, creating the largest independent exploration and production company in Europe. Before the merger was closed, the two companies said they would increase production by 40% by early 2020s and reduce staff by a total of 1,000 jobs in Germany and Norway.

Wintershall Dea said earlier this week it had concluded its negotiations with the German Works Councils and the Mining, Chemicals and Energy Trade Union (IG BCE). An agreement has now been signed with the employee representatives at the German locations for the planned structural changes and job cuts.

According to this agreement, the job cuts are to be implemented in a socially acceptable manner with the aid of various HR tools. Wintershall Dea will therefore forego layoffs until June 30, 2020. There will be no site closures during this period. Wintershall Dea and employee representatives have also reached an agreement on the number of job cuts. Accordingly, the number will be somewhat lower than originally envisaged, the company said.

Most of the job cuts will still be made in Germany. Instead of more than 800 jobs, as planned, 760 jobs are to be cut in Germany. Of these, 420 will be at the group functions in Hamburg and Kassel as well as 340 in the Business Unit Germany with the German production locations. Wintershall Dea currently employs 650 people in Kassel, 520 in Hamburg and around 750 in the Business Unit Germany with the German locations.

According to the company, the aim is to achieve synergy effects through the merger across the board in operations, capital spending and personnel totaling at least €200 million a year. This also involves planned cuts of 1,000 jobs from a total of 4,200 worldwide (full-time jobs, including joint ventures). 760 jobs will be cut in Germany and a further 200 in Norway, where both companies’ activities overlap.

 

Domestic production in decline

 

Wintershall Dea noted that  oil and gas production in Germany would decline further in the coming years due to natural depletion. At the same time, the price of oil will stay volatile and the cost level in Germany will remain high. The merger between Wintershall and DEA offers the two German companies the chance to extend the economic viability of domestic production.

In order to secure the future of production in Germany, Wintershall Dea will therefore focus structurally on the most important business establishments and core business in Schleswig-Holstein and Lower Saxony.

Wintershall Dea currently employs 650 people in Norway. Around 200 of these jobs will be cut, mainly in connection with the completion of large E&P development projects. Wintershall Dea has also reached agreements in Norway with employee representatives and trade unions on the necessary changes.


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