Tags: Technip | job | cuts | oil

Technip to Cut 6,000 Jobs, Shrink Fleet After Slump in Oil Price

Tuesday, 07 Jul 2015 09:56 AM

Technip SA will cut 6,000 jobs and reduce its fleet of oil-service ships to cope with low crude prices.

The worldwide job cuts and reduction in the fleet to 23 vessels from 36 will help the company reach a target of 830 million euros ($920 million) of savings, it said in a statement. Paris-based Technip will take a one-time charge of 650 million euros for the restructuring, mostly in the second quarter.

“The slowdown in the oil and gas industry is prolonged and harsh,” Chief Executive Officer Thierry Pilenko said in the statement Monday. “We have decided to accelerate our cost reduction and efficiency measures.”

Technip supplies equipment and builds plants for oil and natural-gas producers including Total SA, which are reducing spending after warning that project costs have made some unsustainable after the slump in crude prices. Bidding for contracts had led to “irrational behavior,” the oil-service company said, while talks on others had become protracted.

About 700 million euros of the company’s savings will come in 2016 and the rest the following year, according to Technip.

“The sharp fall in oil prices has had a substantial impact on clients’ behavior, national and international oil companies alike,” the company said. “New projects continue to be deferred as clients assess their investment priorities in a durably changed oil price environment.”

A large part of the restructuring is in onshore-offshore operations, which builds platforms and offshore installations, to address recent unsatisfactory performance, it said. The division’s profitability will improve in the second half with adjusted underlying operating income from recurring activities of 140 million euros to 160 million euros, Technip said.

The outlook for revenue was held at 6 billion euros, while that for adjusted operating income from recurring activities was cut to 210 million euros to 230 million euros, from a previous range of 250 million euros to 290 million euros.

Adjusted operating income from recurring activities for subsea operations would be about 840 million euros.


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France's Technip will cut 6,000 jobs and reduce its fleet of oil-service ships to cope with low crude prices. The worldwide job cuts and reduction in the fleet to 23 vessels from 36 will help the company reach a target of 830 million euros ($920 million) of savings.
Technip, job, cuts, oil
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2015-56-07
Tuesday, 07 Jul 2015 09:56 AM
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