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The world’s biggest oil-producing company, Saudi oil giant Aramco, has started laying off hundreds of employees—mostly foreign staff—across several divisions in response to the oil price crash, Bloomberg reported on Thursday, quoting sources with knowledge of the matter.
Aramco, which employs nearly 80,000 people, annually revises down its staffing, but this year’s job cuts are larger than before, Bloomberg’s sources said, while Aramco commented on the report that it was not providing at this point details about the actions it had taken to boost competitiveness and resilience.
Saudi Aramco’s first-quarter net income dropped to US$16.66 billion from net earnings of US$22.2 billion for Q1 2019 due to the coronavirus pandemic and the oil price crash that Saudi Arabia itself helped to worsen with the oil price war in March.
More recently, Aramco was said to have idled offshore rigs and postponed a US$18-billion expansion project in the wake of the demand and oil price crashes. In early May, offshore drilling contractor Noble Corporation plc said that its jack-up rig Noble Scott Marks, located offshore Saudi Arabia, will be suspended at the request of its client for up to one year, beginning in the first half of May. Then earlier this week, Shelf Drilling said that it had received a notification from its customer on the suspension of operations for the High Island IV jack-up rig for up to 12 months. The offshore rig is contracted to Aramco.
The Saudi oil giant is not the only major oil firm to slash jobs in order to cut costs during this crisis.
Earlier this month, supermajor BP said it would cut 10,000 jobs or around 15 percent of its workforce.
As BP aims to reinvent itself as an energy company and a net-zero company by 2050 and sooner, the UK-based supermajor is resorting to job cuts—most of which in office-based positions, in order to reduce its costs as the downturn has severely affected its finances.
By Charles Kennedy of Oilprice.com
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Charles is a writer for Oilprice.com