Around a fifth of North Sea oil and gas contractors have warned they expect to make further job cuts in 2021 as they continue to deal with ongoing turmoil in the sector.
Over the past year, just under half of firms reduced the size of their workforce in response to the Covid-19 pandemic and commodity price crash, with 22% laying off more than 10% of their total headcount, according to a new study.
Aberdeen and Grampian Chamber of Commerce’s (AGCC) 32nd oil and gas survey revealed just 15% of contractors increased staff numbers in 2020.
The research, carried out in partnership with the Fraser of Allander Institute and KPMG, represents the views of 100 firms employing 22,665 people across the UK and over 400,000 globally – the findings cover the six months to October.
It laid bare the scale of uncertainty that’s stalked the sector in recent months, with business confidence across the UK North Sea falling to its lowest level since the 2015 downturn.
And the vast majority of operators (78%) said the outlook for the future isn’t much better, with a solitary 1% of firms feeling more confident.
Just 13% of contractors are working at or above optimum levels on the UK Continental Shelf, compared to 47% a year ago, with 82% predicting a decrease in their revenue in 2020.
AGCC said its survey provided a “stark illustration” of the economic turmoil currently facing oil and gas firms.