TGS shedding workforce citing challenging market conditions
Norwegian marine seismic data acquisition company TGS will lay off more workers “in order to further improve organizational efficiency and competitiveness.”
Citing weak market conditions, TGS said that the company’s global headcount will be cut by around 130 people, or 16 percent of the total workforce.
By cutting the headcount, TGS expects to reduce operating expense by $13 million per year, starting 2016. A restructuring cost of $8 million will be charged to the accounts for Q4 2015.
“This was a very difficult decision and we are committed to assure that the employees leaving the company through this necessary action will be treated with dignity and respect in accordance with TGS’ values,” the seismic surveyor said. To remind, TGS in April this year said it would lay off around 100 workers.
Also, TGS said that the value of some multi-client surveys will be written down to reflect more cautious market assumptions.
TGS explained that these assumptions were influenced by recent remarks made by large oil corporations concerning cuts in exploration & production budgets not only for 2016 but also for 2017 and beyond. The updated assumptions will lead to total impairments for selected surveys of approximately $150 million to be recognized in the Q4 2015 accounts.
“Although the TGS library continues to perform well compared to the industry, we have chosen to take a cautious view when evaluating the net book values. The cost of shooting the same seismic today is dramatically lower than two to three years ago and this has of course played a role in our assessment,” says Robert Hobbs, CEO of TGS.
Offshore Energy Today Staff