Oil and gas services giant Wood Group, is expected to confirm that as many as 4,000 jobs have been cut from its workforce in the first half of 2015, as it releases its interim results Tuesday.
The UK based, company is expected to say that 4,000 jobs have gone globally, with as many as 1,000 in the UK alone. The total number would mean Wood Group has made cuts of around 10% of of its global workforce.
The results would be inline with comments made by Wood Group’s founder, Sir Ian Wood earlier this year, in which he stated that as many as 40,000 jobs in the North Sea alone could be lost unless urgent action was taken.
Sir Ian, who stepped down as Chairman of Wood Group back in 2012, had stated that changes needed to be made to parts of the UK’s tax system that involve the UK’s offshore energy industry, in order to stop a large downturn.
Tax cuts were forth coming from the government, with older offshore fields getting a cut of 5%, taking the rate from 80% down to 75%. However, newer fields received the biggest tax cut of 10%, moving current rates from 60% down to 50%.
The slump in the global oil price has hit the UK’s offshore industry particularly hard, with costs involved in keeping its ageing offshore platforms continuing to grow.
Many commentators have suggested that the majority of the UK’s offshore assets, most in excess of 25 years old, need a price per barrel of US$70 – US$80 to be profitable.
With current job cuts yet to be confirmed, it is unclear whether Wood Group will need to cut further in the remaining quarter of 2015.
Wood Group is due to release details at 0900 London. Offshore Post will update at this time.