Aberdeen-headquartered energy services firm Wood has said “employee reductions are being made” in order to tackle the effect of the coronavirus outbreak.
The company has set out the range of measures it is taking in response to the impact of the virus on its business.
Headcount reductions, temporary furloughing, unpaid leave and operational salary reductions are among them, with a focus on redeploying workers wherever possible.
“Regrettably”, the firm added, cuts are being made “in certain areas reflecting the reduction in operational activity”.
When asked to clarify the implications for its Aberdeen workforce, Wood said it is “working to establish the impact of COVID-19 and the subsequent decline in oil price for each region, including the North Sea”.
The firm pointed to a recent deal, which covers jobs offshore, made by Wood and other members of the Offshore Contractors Association (OCA), which will ensure workers receive the government’s furlough scheme if they are at risk of redundancy.
A spokesman said: “We welcome the announcement earlier this week from the OCA and the Trade Unions on the supplementary project agreement (SPA).
“It will ensure that any of our people in the North Sea affected by COVID-19 can benefit from the UK Government’s Job Retention Scheme.”
On top of this, Wood’s board and senior leaders, as well as certain other employees, are taking a 10% cut in base salary which is expected to save around £32.2million.
A dividend to shareholders, recommended at the end of last year, is also being withdrawn which was expected to cost £128m.
Capital expenditure is being cut in some areas to save another £16m – £20m.
Meanwhile Wood’s annual general meeting, planned for May 7, has been postponed due to the virus, with details of a revised date to be provided “as soon as possible”.
The firm’s order book at the end of February was £6.4bn, but said it expects some of that to be postponed and for new order intake to be slower due to the impact of lower prices and Covid-19.
Oil prices were down to a 20-year low this week, however Wood has diversified its portfolio in recent years from taking 90% of its revenue from oil and gas in 2015 down to about one-third of it coming from that source today.
Chief executive Robin Watson said: “Like many companies, Wood is being affected by the unprecedented event of Covid-19 and its impact on the global economy – an event compounded by the sharpest decline in oil price in 20 years.
“Our strategy has led to a substantial broadening of our business across energy and built environment markets, reducing our reliance on any one industry or sector.
“Our proven track record of leveraging our flexible, asset light model in response to changing market conditions stands us in good stead.
“ Today we announce a series of actions which keep our people safe and healthy and will further protect our business and our stakeholders by reducing cost, protecting cashflow and ensuring continued balance sheet strength.
“This includes the Board’s prudent and appropriate decision to withdraw its recommendation to pay the proposed 2019 final dividend.”
Wood has operations in 60 countries, employing a workforce of around 60,000 people.