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Image courtesy of Subsea 7/Linkedin.

Subsea 7 said Wednesday that it will cut over 1,000 jobs over the next year as part of a cost-reduction effort.

The company will reduce its global workforce to about 8,000 by early 2017, down from its current level of 9,200.

The company said that consultation with employees and employee representatives will take place on a local basis.

Subea 7 added that it has begun the consultation processes in Norway and the UK.

The UK-based company said that “in view of continued difficult business and economic conditions in the oil and gas market, a second phase of global resizing and cost reduction measures will begin in 2016.”

Subsea 7 said its fleet of active vessels will be managed “commensurate with the projected workload, while retaining capability and maintaining a global presence.”

The company said that up to five vessels are scheduled to leave the current active fleet by early 2017, based on stacking owned vessels and returning chartered vessels when existing contracts expire.

The cost reduction and resizing measures, along with other measures initiated since the start of the year, are expected to deliver about $350 million in annualized cost savings.

The company said the charge related to the resizing will be recognized in 2016 and is expected to be less than $100 million.

Subsea 7 said it will also change the structure of its organization as of July 1.

The new organizational and reporting segments will be: SURF and Conventional, i-Tech Services and Corporate (including Renewables and Heavy-lift).

The new segments will replace the Southern Hemisphere and Global Projects and Northern Hemisphere and Life of Field Business Units and Corporate segments.

Under the new organisational structure Chief Operating Officer John Evans and appointed Executive Vice President – Commercial Øyvind Mikaelsen will report to Chief Executive Officer Jean Cahuzac.

Steve Wisely will be appointed Senior Vice President i-Tech Services and report to Evans.

“Our new organisational structure reflects our focus on commercial and long-term strategic priorities as we adapt to the present low levels of activity and drive more efficient ways of working with our clients. The reduction in the size of our workforce is a necessary step to maintain our competitiveness and protect our core offering through the oil price cycle,” Cahuzac said.