Petronas job cuts in line with industry norms, says Shahril
Petronas president and group CEO Tengku Muhammad Taufik Aziz said last week the company would cut about 10% of its workforce in a company-wide restructuring exercise. (Reuters pic)
PETALING JAYA : Petronas' decision to lay off 5,000 workers is in line with the challenging global situation in the oil and gas industry, says a former economic director in the Prime Minister's Office (PMO).
In the latest episode of the Keluar Sekejap podcast, Shahril Hamdan also said Petronas's move was apt considering the national oil company's revenue per employee (RPE), which he said stood at RM6 million in 2015.
'The RPE of Petrobras is US$2 million to US$3 million… and Pertamina's is around US$1.5 million to US$2 million,' he said, referring to the state-owned oil companies of Brazil and Indonesia respectively.
'So there is a need for Petronas to be more optimal.'
Shahril also said the public had to accept the fact that the oil and gas landscape had changed over the years.
He said it was clear that Petronas – or any other oil and gas company – would have to evolve from the 1990s, when exploration costs were much lower.
Shahril also said other large oil and gas companies had taken steps to reduce their workforce although their production levels might not have dipped.
He said this was especially evident in the United States, which has seen a drop in oil and gas industry workers despite production still at a high level.
'However, the number of workers required has indeed decreased,' he said.
'So there is 'productivity gain', which is indeed normal in this industry.'
A former Umno information chief, Shahril was an economic director in the PMO under former prime minister Ismail Sabri Yaakob.
Last Thursday, Petronas president and group CEO Tengku Muhammad Taufik Aziz said the company would cut about 10% of its workforce in a company-wide restructuring exercise that was aimed at reducing costs due to falling crude prices.
He said Petronas expects to reduce its headcount by more than 5,000 people and freeze hiring until December 2026.
Deputy prime minister Fadillah Yusof later said Petronas's restructuring exercise was due to global challenges and was not linked to its dispute with Sarawak's state-owned gas aggregator, Petroleum Sarawak Bhd.
Petronas has promised to support employees affected by the exercise, including by offering competitive separation packages.
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