Saipem has revealed a strategic plan that will allow the company to face more challenging market conditions that will see the company split into five divisions.
The company said that recovery is expected to take longer than previously estimated, which has resulted in the loss of 800 European jobs.
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Image from Saipem. |
Refocusing the business portfolio, de-risking operations, optimizing costs, making processes more efficient, and emphasizing technology and innovation, are all reaffirmed as the basis of the group's strategy, Saipem said in its Q3 and nine-month 2016 report.
The new strategic plan will create five divisions/companies including: offshore construction; onshore construction; offshore drilling; onshore drilling, and a new entity dedicated to high added value engineering activities and services, aimed at improving the offer in a structured way and bring the company closer to its clients’ needs.
“It has been decided to adopt a new, leaner, more effective and more efficient organizational model, aimed at entrusting individual businesses with greater responsibility for project outcomes and performance,” Saipem said. “This will allow for increased decision-making agility, greater consistency between responsibility for results and attribution of decision making levers, complete autonomy in the identification of priorities, and greater focus on project execution.”
The plan is also aimed to generate greater efficiency in its European based facilities, which has suffered a reduction of about 800 jobs.
"Thanks to the new and leaner operating processes, the new organization will lead to a better deployment of human resources competences within the group," Saipem said.
The strategic plan also includes rationalization of the asset base, mainly concerning a number of vessels and rigs in the drilling and offshore engineering and construction (E&C) sectors, in addition to several yards in the E&C offshore and onshore sectors.
In the first nine months of 2016, Saipem’s revenue a slight slump at US$8.6 billion (€7.9 billion), representing a 6.6% when compared to last year.
Also in the first nine months, Saipem was awarded new contracts worth $7.2 billion (€6.6 billion), compared to 2015’s $5.8 billion (€5.4 billion). As of 30 September, the company’s backlog was nearly $16 billion in total.
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