Subsea services company Royal IHC intends to reduce around 425 permanent and temporary contracts, mainly in indirect and support positions, due to "persistently poor market conditions".
Subsea services company Royal IHC revealed that it intends to reduce around 425 permanent and temporary contracts, mainly in indirect and support positions, due to “persistently poor market conditions”.
In response to the need for cutbacks, the company announced that its executive board is being reduced to just two members, comprising CEO Dave Vander Heyde and CFO Arie Vergunst. In addition, it was revealed that Royal IHC’s section-building activities will be further outsourced in order to respond to competition from Eastern Europe and Asia.
“Economic developments in the markets in which IHC operates continue to be extremely turbulent. As in 2015, the oil price and increasing international competition in particular have led to a significantly lower order intake in the first nine months of 2016 than anticipated,” said a company spokesperson.
“IHC has already announced that it expects to remain below the forecast sales budget for the whole of 2016. The associated low level of turnover makes it necessary to drastically cut costs, particularly in support positions within the organization…IHC expects to emerge from this downsizing process as a smaller and healthier company that is once again able to flourish as a leading supplier of maritime equipment.” the source added.
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