Job Cuts set To Reach 120,000 Since Peak Of The Oil Industry In 2014
According to a lobby group and following the collapse of oil prices, the UK oil and gas industry will cut 120,000 jobs by the end of this year. This year there is said to be 330,000 jobs supported by the production of oil and gas however this is down from the 450,000 figures recorded in 2014. These figures do also include non-oil producing jobs in the economy.
The estimated figures show how much companies have cut back on the workforce to get through the collapse of crude prices. The global benchmark Brent, has seen prices drop from $115 to just over $50 per barrel.
Deidre Michie, the chief executive officer of Oil and Gas UK stated that the industry has been spending more than it has been earning since the price slump, and the only way to survive means that the industry has no choice but to improve its performance.
In January, BP Plc, announced that it would cut 600 North Sea jobs in the next 2 years, whilst Royal Dutch Sea Plc, announced cuts of 475 mainly this year in the exploration and production in Ireland and the UK.
The jobs cuts are due to this industry being forced to reduce its expenditure and reduce assets. The main players are also cancelling or postponing any development projects and have even gone as far as cutting dividends. Shell announced last week that they would be making cuts to its spending plans of $29 billion from a forecast of $30 billion.
The total employment that the oil industry will be able to support will depend completely on the level of investment the industry can attract. Michie stated, “Falls in investment will inevitably equal cuts to the work force.”