Malaysia's offshore drilling and oilfield services contractor UMW Oil & Gas Corp. Berhad (UMWOG) cut nearly 300 jobs, affecting mostly contract staff in rig operations as the company streamlined its workforce to combat the downturn in oil prices, national news agency Bernama reported Tuesday.
"We did not renew their contracts when they expired, mostly on the operation side, as when the rig is not operational, we have to let go (contract staff)," UMWOG President Rohaizad Darus said after the firm's annual general meeting in Kuala Lumpur, Malaysia, adding that no permanent staff had been laid off.
UMWOG also revealed it has no intention to renew the contracts of expatriates when their terms expire.
In addition, the company is looking into the possibility of implementing a reduction in staff benefits and remuneration. This follows a 40 percent reduction in senior management's remuneration in 2015, compared to 2014.
"We try not to impact the lower (level) workers, because we understand the rising cost of living in this country now and we do not touch managers and below," he said, as quoted by Bernama.
Meanwhile, UMWOG's other cost-cutting measures include a reduction in inventory and capital cost, negotiation with vendors, and improvement in company processes. Cost reduction measures has resulted in more than $4.5 million (MYR 18 million) savings in the first three months of this year.
"We need to ensure that we are efficient in terms of cost, to operate at the best level, and are able to offer competitive prices," Rohaizad said.
In a related development, UMWOG is bidding for 22 tenders in the Middle East and Vietnam, President Rohaizad said, as reported in Malaysian daily The Star Tuesday.
UMWOG posted a loss of $86.9 million (MYR 349.4 million) last year, down from a profit of $70.7 million (MYR 284.1 million) in 2014, while its drilling services segment incurred a loss of $96.1 million (MYR 386.456 million) and posted a profit of $67.9 million (MYR 272.838 million) in the same period.
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