Houston-based McDermott International Inc. said it has eliminated about 1,700 job positions, mostly skilled labour jobs in its global fabrication yards.

The energy engineering and construction company said it cut its employee count by 475 through the end of March to save $27.6 million, as well as axing more than 1,200 additional positions that are mostly craft labor jobs. Last year, McDermott employed about 14,000 people globally, so it cut roughly 12 percent of its total workforce.

The job cuts began in October and included 48 corporate positions eliminated in Houston, said Rick Goins, McDermott’s director of global communications. But all of the skilled labor job cuts came outside of the U.S., he said.

For the first quarter of 2015, McDermott posted a loss of $14.5 million, or 6 cents a share, including $10.4 million in restructuring charges, which compared to a larger $46.5 million loss, or 20 cents a share, for the same quarter in 2014.

Despite the losses, McDermott President and CEO David Dickson said in a prepared statement that the company is in a good position moving forward with several new contracts in the Middle East and South America, despite the ongoing industry problems with low oil and gas prices.

Dickson also attributed some of the financial losses to seasonal weather problems and to project delays caused by third-party companies, including two cyclones that slowed the Ichthys liquefied natural gas project offshore of western Australia.

As for the job cuts and restructuring, McDermott announced that it has moved toward “increased organizational efficiency,” the “centralization of various front- and back-office functions,” and the outsourcing of some non-core business activities.

Dickson said in a conference call that the craft labor job cuts are intended to mesh the workload with the billable costs.

“We see this as a normal mode of business going forward,” Dickson said. “And we expect to see increases and decreases in our craft levels just depending on the various sequencing of our projects in their life cycle.”

Source: www.fuelfix.com

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