OSLO: Houston-based oil equipment maker National Oilwell Varco’s Norwegian arm said Wednesday it is shedding 1,500 jobs, or about a third of its staff here, as sales drop on lower oil prices and industrywide spending cuts, a day after Norway’s dominant oil company Statoil ASA announced a similar-sized job cut.
National Oilwell Varco Norway said it would shed 900 permanent jobs and 600 contract workers out of a total Norwegian workforce of about 5,000. The drilling equipment maker blamed the downsizing on reduced spending by oil companies and lower sales of new equipment.
“Due to the uncertain market situation, we can’t say how extensive the workforce reduction process will be in the longer term,” the company said.
Statoil, Norway’s dominant oil company, said Tuesday that it would shed up to 1,500 permanent positions and 525 consultants from a total Norwegian workforce of 20,709. The move is part of a program targeting $1.7 billion in annual cost savings by 2016.
The string of job cuts by major employers in the Norwegian oil sector highlights the industrywide challenges as oil prices have dropped more than 40% from a year ago to $65 a barrel, which is forcing oil companies and oil-field services businesses to tighten their belts after years of rapid expansion and cost inflation.
National Oilwell Varco had 63,642 employees globally by the end of 2014 and its Norwegian arm contributed about 4% of the company’s total $21.44 billion in total revenue last year.
The company said it had informed employees in four locations in Norway about the decision Wednesday. The management said it “understands that such a downsizing leads to worry and uncertainty and may put many employees in a difficult situation.”
