Singapore-based Keppel Corp announced Thursday it had cut around 8,000 jobs as weak energy prices hammered profits at the world's largest oil rig builder.
Senior managers have also taken voluntary pay cuts and there are plans to trim directors' fees as the conglomerate anticipates further cuts, the company said in a statement.
The "painful measures" are aimed at cushioning the impact of sluggish demand for drilling rigs as firms worldwide curtailed spending oil and gas exploration.
Keppel chief executive Loh Chin Hua said it had slashed its workforce at its offshore and marine business by "close to 8,000", or around 26 per cent, over the nine months to September.
"Much of the reduction has so far been through natural attrition," he said in announcing Keppel's third quarter to September earnings.
"However, we will increasingly also look into early termination of contracts and selective retrenchment in Singapore, in line with the drop in workload." Keppel said group net profit for the July-September period fell 38 per cent from the previous year to S$225 million after net profit in its offshore and marine business plunged 93 per cent.
In the first nine months of the year, the group's year-on-year net profit was down 43 per cent to S$641 million, hit by a 69 per cent profit decline in the offshore business.
While OPEC's announcement late last month to cut output sent oil prices rising above US$50 (S$70) a barrel, "oversupply remains a key concern in the offshore market, worsened by the overhang of rigs still under construction," he said.
"With priority given to strengthening their balance sheets, the oil majors are expected to continue to hold back on offshore exploration expenditure."
Oil prices fell from a high of more than US$100 a barrel in June 2014 to near 13-year lows of below $30 in February due to a supply glut and weaker demand.
Loh also said Keppel is retooling its rig making technology for other uses like building floating power and desalination plants as it diversifies beyond oil and gas.