France’s Technip said Tuesday that it will lay off 6,000 workers as oil and gas firms continue to defer projects amid low oil prices.
Technip will reduce its global workforce by 6,000 employees and accelerate cost reduction and efficiency in “anticipation of an even more challenging environment in oil and gas.”
The company is still reeling from last year’s oil price rout that prompted oil and gas firms to slash budgets and put projects on the back burner.
Technip said that negotiations for contract changes and variations have been “protracted” and added that some onshore and offshore project discussions have “stopped and will find their resolution through a legal process.”
“We conclude that these trends have not improved and, in some cases, have actually worsened over the last two months,” Technip added.
The company also plans to ramp up its direct and indirect cost cutting efforts while maintaining its strategic direction.
The restructuring plan will target savings of $907 million, with about $765 million in savings to be delivered in 2016 and the balance in 2017.
The plan will have one-off charges of about $710 million.
Technip added that its subsea unit “continues to execute well” and the outlook for full year adjusted operating income from recurring activities has been confirmed.