Maersk Drilling cuts more jobs

Monday, October 24, 2016

Maersk Drilling is reducing its workforce at its Copenhagen headquarters by 70 in response to the continued market decline and reduced industry activity.

Image from Maersk.

The Danish company has already reduced its offshore staff by more than 600 in the past 12 months, in addition to undergoing a reorganization last month under its parent company, AP Møller-Mærsk.

Of the 70 workforce reductions, about 20 of those positions will not be filled.

“The combination of low activity levels and excess capacity of drilling rigs continue to drive lower utilization and lower day rates. At present, nine out of Maersk Drilling’s 23 units are lying idle, and we expect the market balance to be challenged in the coming years,” Claus V Hemmingsen, CEO of Maersk Drilling and vice CEO of the Maersk Group said. “As a consequence, we have had to say goodbye to more than 600 offshore employees in the last 12 months.”

As of today, Maersk Drilling said it currently employs an international staff of 3500.

“To date, Maersk Drilling have managed to reduce cost by more than 15%. However, the adverse market conditions continue to heavily affect us, and an onshore staff reduction is an unfortunate but necessary step to safeguard the future of our company,” he said.

Maersk Drilling warned that its headquarter functions situated in other locations than Copenhagen might also be affected by the most recent job cuts.

In late-September, AP Møller-Mærsk announced it was dividing into two: an integrated transport and logistics company with digitalized and individualized customer solutions; and an energy division, focusing on oil and oil-related businesses, and on optimizing and strengthening its strong position in the Danish, British and Norwegian parts of the North Sea.

In February, Maersk Drilling warned that there was a need for a different cost level in the offshore drilling industry.

Though the company entered into 12 contracts in 2015, they were significantly at a lower dayrate than before, which Maersk Driling said would lead to a "significantly lower underlying result in 2016 than in 2015."

Maersk Drilling’s fleet includes 23 drilling rigs including deepwater drillships, semisubmersibles, and jackup rigs. The company also has one ultra-harsh environment jackup rig under construction.

Maersk Drilling generated a profit of US$751 million in 2015.

Read more:

Maersk divides, reorganizes

Maersk Drilling warns of low 2016 rates

Categories: Europe Maersk

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