Petronas layoffs reflect wider oil and gas challenges, says former PMO adviser
KUALA LUMPUR: Petroliam Nasional Bhd's (Petronas) decision to lay off more than 5,000 employees reflects the broader challenges facing the oil and gas sector, said a former economic director in the Prime Minister's Office (PMO).
In an episode of his podcast Keluar Sekejap, Shahril Hamdan said that, based on 2015 data, Petronas generated around RM6 million in revenue per employee, compared to other national oil companies (NOCs).
Shahril said Brazil's Petrobras and Indonesia's Pertamina were generating higher revenue per employee in 2015, adding that Petronas — and the public — must accept that adjustments are necessary to remain competitive.
He also said that the oil and gas landscape today is vastly different from that of the 1990s, when cost structures were lower and exploration was less technically challenging.
Shahril, a former Umno information chief, had served in the PMO during the reign of Datuk Seri Ismail Sabri Yaakob.
With easy-to-access oil and gas fields already tapped, companies around the world today are operating under new constraints, he said.
"In the United States, for instance, it's the clearest example, where even though many barrels of oil are produced, employment in this sector has decreased," Shahril said.
Petronas president and group chief executive officer Tengku Tan Sri Muhammad Taufik had said that the company expects to reduce its headcount by "upwards of 5,000" as it right-sizes its workforce amid an evolving and increasingly challenging operating environment.
Taufik added that all those affected will be informed by the end of the year. The national oil company will also freeze recruitments until December 2026.
Petronas, which has some 52,000 employees globally, first announced in February this year that it was set to begin rightsizing its workforce by mid-2025.
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