Keppel axes over 6,000 O&M workers as contracts dry up

It needs to rightsize to stay afloat.

Keppel Corporation’s shrinking staff numbers paint a disheartening picture of its battered offshore and marine segment. In its latest earnings presentation, Keppel reported that it has let go of about 6,000 direct staff in its local and overseas yards since January 2015, in a bid to slash costs and optimise its current operations.

Meanwhile, the size of its Singapore subcontract workforce has dropped by about 7,900 workers, representing a fourth of Keppel O&M’s subcontract employees.

Keppel suffered a wave of contract deferrals in the past year. It started the 2015 with the expected deliveries of 15 drilling jackup rigs, but eight of these have since been pushed into 2016.

“Bracing ourselves for a possibly long winter, we need to ensure that our overheads are well under control and that we are ready if the market conditions get tougher. We are preparing ourselves to meet the near term challenges by rightsizing our operations and resources,” said Keppel CEO Loh Chin Hua at the group’s earnings presentation.

Although Keppel is focussed on reducing costs, Loh stressed that it is still investing prudently in R&D as well as improving its productivity and core competencies.

“The storm hitting the offshore and marine business is not one which we are unfamiliar. Keppel had braved through many cycles, emerging stronger and more resilient each time,” Loh said.