Maersk Oil To Cut Up To 12% Jobs To Reduce Costs Amid Oil Price Slump

Maersk Oil, part of Danish conglomerate A.P. Møller-Maersk A/S, is planning to enforce job cuts globally as crude prices continue to fall. The company said Monday it would cut between 10 percent and 12 percent of the workforce as it looks to reduce expenses.

A report by Bloomberg said that by implementing the job cuts, Maersk Oil could reduce costs by nearly 20 percent by the end of 2016. The latest decision would take the total number of job cuts in the company to 1,250 this year. According to a report by the Wall Street Journal, nearly 540 people will lose their jobs. The company has a total workforce of about 4,500.

Maersk Oil said in a statement Monday that its operations in Qatar and Norway will witness job cuts in the range of 10 to 12 percent. The company’s operations in Denmark and Kazakhstan and its Copenhagen headquarters will see slightly lesser number of job reductions.

“These are difficult decisions for any business and my immediate concern is for the welfare of those affected directly by today’s news,” Jakob Thomasen, the CEO of Maersk Oil, said in the statement.

Maersk Oil also said it will cut 220 job positions related to the Janice asset in the U.K. North Sea oilfield. In the wake of falling crude prices, the company had announced in August that it would seek regulatory permission to close the Janice installation, which produces nearly 7,000 barrels a day from three seafields, Reuters reported.

Maersk Oil also announced that in the United States and Angola, it will cut 60 job positions, linked to delays in the company’s project in the deepwater field in Chissonga, Angola.

The company said the decision "follows an extensive internal review of business activities and continued low oil prices," adding that it works in “a materially changed oil price environment."

“We expect the pressure to continue into 2016 and we must remain cost-focused to grow in this market. I commend our people for the improvements in our operating performance whilst we have been managing down costs across the organization,” Thomasen said in the statement.

The move comes soon after the parent company A.P. Møller-Maersk A/S last week reduced its full-year profit guidance. Maersk Oil had also cut $1 billion from its annual budget for capital expenditure on Sept. 9, Bloomberg reported.

According to a report by the Associated Press, Maersk Oil produces nearly 555,000 barrels of oil a day in Denmark, Britain, Qatar, Kazakhstan, the U.S. Gulf of Mexico, Algeria and Brazil.