Aker Solutions is streamlining the Norwegian maintenance, modifications and operations (MMO) business to one regional unit from previously four, affecting management and staff from Tromsø to Stavanger.
The company feels the steps are necessary to reposition the business and enhance competitiveness in a challenging market.
Job Cuts
Depending on future work levels, as many as 900 permanent positions may be impacted at facilities in Stavanger, Bergen, Kristiansund, Trondheim, Tromsø and Sandnessjøen as well as offshore. The workforce reductions will be made through regular employee turnover, reassignments to other parts of the company and redundancies.
A process to implement about half of the reductions will start immediately. Remaining adjustments will depend on work levels throughout the year. The company has previously reduced capacity in its Norwegian MMO business by about 1300 permanent and temporary positions since July 2014 to adjust to a market slowdown.
Drop in Activity in Norway's Offshore Services Market
'These measures are painful but necessary to strengthen the competitiveness and longer term potential of our Norwegian MMO business, which has suffered from a sharp drop in activity in Norway's offshore services market,' said Luis Araujo, chief executive officer of Aker Solutions.
The more streamlined business will support leaner processes and bolster overall operations. It will build on the company's core strengths in the MMO area, particularly within more complex modifications projects.
Downturn in Investments
There has been a substantial downturn in investments in the Norwegian oil and gas market since 2014. Aker Solutions expects the MMO market in Norway to continue to be challenging in 2016. Work volumes will also be impacted as the company's long-term maintenance and modifications framework agreement with Statoil expires in the first half of this year.
As a result, the company's prefabrication workshop in Sandnessjøen will be temporarily shut down for about three years. MMO operations in Tromsø will also be terminated, though some employees in this strategically important northern location will likely be kept on as part of the company's Arctic Hub. These employees will join Aker Solutions' Engineering and Front End Spectrum teams.
Aker Solutions has about 16,000 permanent employees in some twenty countries. About 5000 employees are in the MMO area, of which approximately 3600 are in Norway.
