© Reuters. Message: Petrofac seeks to lay off workers and is considering reducing wages
By Hadeel Al-Sayegh
DUBAI (Reuters) – An oilfield services provider, Petrofac, is launching a layoff program that the company expects will reduce employee numbers by 20 percent as it seeks to cope with a collapse, a source and an internal email message seen by Reuters said.
The British-based company said the layoffs are voluntary but may become mandatory if not accepted by a sufficient number, adding that it may consider reducing basic wages by at least ten percent for many employees.
“Falling oil prices may have a major impact on the demand for our services in the short and medium term,” Ayman Asfari, CEO of Petrofac Group, wrote in the email sent to employees on Thursday.
“We must act immediately and decisively to protect the future of our business,” he added.
The source confirmed the content of the message.
“As a responsible company, and like most companies in the sector, we are putting in place a number of internal procedures to help us deal with the challenges of the current environment,” said a spokesman for Petrovac, which designs, builds and operates oil and gas facilities.
About two-thirds of its value was lost in the first quarter of the year as demand tumbled due to steps to halt the spread of the Corona virus and amid a battle over the market share between Saudi Arabia and Russia, which resulted in additional pumping of oil into a market filled with supply.
Other energy companies have announced measures to tackle the slowdown, including deep cuts to expenditures.
Petrofac CEO said that the voluntary layoff program will be offered to employees for a period of two weeks, but the company may consider mandatory layoffs after that period.
Asfari said the company also plans to cut planned capital spending by 50 percent.
He wrote that Petrofac “will likely consider reducing basic salaries and allowances by at least ten percent for many employees.”
He added that she is also exploring the option of benefiting from government support to pay workers ’wages in countries that have announced such programs.
Petrofac works worldwide including with national oil companies such as ADNOC and Saudi Aramco, and its revenues reached $ 5.5 billion last year and employs about 11,500 people.
(Covered by Shadia Nasrallah in London – Ahmed Elhami prepared for the Arab publication)
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