A diversified energy and resources company dismissed thousands of employees due to economic uncertainty from a deadly disease.
Worley retrenched 3000 workers, mostly from its construction division, after facing difficult economic conditions in the first three months of the year due to the Chinese coronavirus pandemic.
45 per cent loss
The business suffered a major drop in business after customers decided to delay, defer and cancel field-based work. There has been a 45 per cent fall in revenue from upstream and midstream oil and gas projects.
“The full impact and duration of the current economic circumstances are uncertain,” Worley said in a public statement. “Headcount was 56,000 as at 31 March 2020, down 5 per cent from 59,000 as at 31 January 2020. Most of this reduction was in field-based work specifically lower margin construction related activities.”
No pay rise
The business is still providing field-based services to build, improve, operate and maintain infrastructure across the nation and abroad. Many of the retained office workers have been asked to work from home.
In addition to the redundancies, Worley is not giving wage increases, reducing workload for consultants, delaying all non-essential spending and reducing operational and support expenses.
“The freezing of salaries and non-billable recruitment are in place with other options being considered on a case by case basis, such as reduced hours, use of paid/annual leave, furloughs, job sharing, early retirement, redeployment and workforce reduction,” the company said. “Chargeable hours for professional services have reduced by 2 per cent in March 2020 when compared with February 2020.”
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In March the business borrowed $480 million to cover 12 months of operating expenses. It has since secured a further $465M in debt facilities with 12-month terms.