Keppel Corporation said on Thursday that its offshore and marine division cut over 10,000 jobs last year and will be reducing its yard capacity in 2017.
The Singapore-based company said that Keppel Offshore & Marine reduced its direct workforce by about 10,600, or 35 percent, for the full year 2016.
About 3,800 of those jobs were in Singapore and about 6,800 of those jobs were overseas.
Keppel O&M’s subcontract headcount in Singapore was further reduced by about 3,300 positions in 2016.
In the fourth quarter, Keppel O&M reduced its direct workforce by 2,620, or about 11.8 percent, from the previous quarter.
That reduction included about 1,930 jobs in Singapore and 690 jobs in the firm’s overseas yards.
“The painful but necessary measures to rightsize our O&M Division must continue,” Keppel said.
Keppel said that, in tandem with the job cuts, the O&M division will also cut its yard capacity and has “mothballed” two overseas yards.
The company added that its O&M division is in the process of closing three yards in Singapore.
“We understand the strong headwinds in the offshore industry and continue to work closely with our customers to respond to the challenging conditions,” Keppel said.
Keppel O&M expects its yards to deliver about 20 newbuild and conversion projects this year including the world’s first-of-its-type FLNG vessel conversion, Golar Hilli.
Keppel O&M’s operating profit was $289.73 million (S$412 million) for the fiscal year 2016 with an operating margin of 14.4 percent, before impairments of about $194 million for fixed assets, stocks and work-in-progress and investments.
Keppel said that Keppel O&M has achieved cost savings of about $105 million thanks to overhead reductions.
“We have responded decisively to the challenging conditions facing our offshore and marine business, not just in anticipation of a long and harsh winter, but also to build a stronger, leaner and more competitive Keppel O&M,” Keppel said.