Worley has cut reduced its workforce by 5%, slashing 3,000 jobs amid the current economic circumstances caused by the COVID-19 pandemic and oil price collapse.
The Australia-based engineering services provider said that the job cuts took place between 31 January and 31 March 2020, mainly in field-based work, particularly across lower margin construction-related activities.
As of March-end, the company’s headcount stood at 56,000.
Worley said that operationally, due to the prevailing economic circumstances, there has been some contraction in the business caused by customers’ delays, postponements, and cancellations, especially in field-based work.
Currently, the company expects 20% of its revenue to come from exposure to the upstream and midstream oil and gas expenditures of customers, which was previously 65%.
The company also said that 45% of its revenue is derived from operating expenditures of its customers, which has increased from 10-15%. As per the engineering services provider, operating expenditure contracts tend to be longer term, multi-year contracts.
Worley said that it will continue to optimise staffing levels and costs while retaining capability. Furthermore, the company will be freezing salaries and non-billable recruitment.
The company will also postpone all its non-essential capital expenditure while adjusting operational as well as support cost structures.
Additionally, the company said that it has worked with its banking partners to secure an additional AUD465m ($304m) in debt in 12-month facilities.
Worley CEO comments on the measures taken in response to COVID-19 and the economic situation
Worley CEO Chris Ashton said: “We are responding with agility to the rapidly changing environment. We are ensuring the safety and wellbeing of our people, we have increased our liquidity position and we continue to review and adjust the business operationally.
“I am proud of our people as they demonstrate resilience and harness their ingenuity and expertise supporting customers, colleagues and communities.”
