Aibel in new job cuts

Cutbacks: hitting Aibel's key M&M business

Aibel is slashing another 250 staff in further manpower cutbacks by the Norwegian oilfield services contractor after seeing a drastic reduction in its workload due to spending cuts by major client Statoil.

The latest redundancies, announced to Aibel’s workforce late on Tuesday, will include 80 positions at its Bergen location and reportedly affect mainly engineers, project leaders and procurement staff.

They follow a similar manpower reduction that was announced earlier this year, bringing the total tally of job cuts at the contractor to 480 so far in 2014.

An external consultancy has been hired to find alternative work for retrenched staff, a company spokeswoman told local newspaper Bergens Tidende.

She would not be drawn though on whether there would be further cuts among the Stavanger-based contractor’s remaining workforce of around 5200 staff.

Aibel has been particularly hit by cutbacks in maintenance and modification (M&M) spending by Statoil, which earlier this year revealed it aims to trim its budget in this area by 20% as part of an effort to reduce capital expenditure by $1.7 billion between 2014 and 2016.

The contractor, which describes M&M as the “backbone” of its business, has a dominant 50% share of the Norwegian market and employs around 4500 of its staff in this segment.

Aibel has long-term M&M frame agreements with Statoil, ConocoPhillips, Shell and Det Norske Oljeselskap.

Earlier this week, compatriot Apply Sorco was reported to be laying off staff for the same reason, while Aker Solutions as well as other contractors have also been hit by the Statoil cutbacks.

Meanwhile, staff at another Norwegian oilfield services contractor, Bilfinger, are said to be bracing for an imminent announcement of redundancies expected to come later this week.

The company, which employs more than 1500 personnel in Norway, has also seen reduced demand for its services in the area of insulation, scaffolding and surface treatment for offshore platforms as a result of the M&M cuts.

Its technology and support director Tor Minsaas told local publication Stavanger Aftenblad: “We are looking at reductions in manpower and costs, but I cannot reveal more details at the moment. We have had a lot of work for many years, but we are now seeing a reduction in activity.”

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