Norwegian-headquartered Havyard Group says it is forced to cut 100 full-time jobs across its workforce as part of a restructuring to keep the company profitable amid the anticipated prolonged downturn in the offshore market.
Havyard says that all of its business areas have been impacted to a varying degree by the downturn in the offshore oil and gas industry driven by low oil prices. As a result, Havyard has made the tough decision to implement cost cutting measures that will entail, among other things, the slashing of its workforce by around 100 full-time equivalents.
The group says that like most companies operating within the maritime cluster, Havyard has grown and increased its capacity in recent years driven by an extraordinary boom in the offshore industry since 2005.
“This extraordinary boom has now become a market with little demand and extreme pressure on prices, especially as regards offshore vessels,” says Geir Johan Bakke, CEO of Havyard Group ASA. “The downturn in the market is expected to last for a while, and we don’t expect the next upturn to be as big as the last one either.”
“Our goal is to ensure our profitability in the long term and secure jobs by adapting to the market and improving our competitiveness. We are far from the only company in Norway that is facing this challenge. The rest of the world had to take action in order to adapt to the situation after the financial crisis in 2008, while Norway has to some extent been shielded from its effects by high oil prices and political measures. The drawback is that our competitiveness has been weakened in relation to the countries we compete against, and when the market falls, we are extra vulnerable. It is not too late to do something about this, and I strongly believe that Havyard, the maritime industry and other industries in Norway that are exposed to competition will restructure and become competitive again. In Havyard, these processes have long been ongoing and we see opportunities as a result of our having gained a foothold in other markets than the offshore market. Fish, aquaculture and windfarm service vessels are markets where there is still demand and where Havyard’s business areas that have products aimed at these markets are in a more favourable position. We also believe that the offshore market will bounce back and are optimistic on behalf of both Havyard and the industry in the longer term.”
The upcoming downsizing is expected to involve all business areas in Havyard Group, but the biggest cuts are expected in the Havyard Ship Technology and Havyard Design & Solutions areas, although it is expected that the number of employees will be reduced in most of Havyard’s locations.
“Extensive restructuring measures of this kind are difficult for both the company and the workforce,”” says Frank Levi Kvalsund, HR Director of Havyard Group ASA. “It is particularly difficult for those directly affected by the cutbacks, of course. We nonetheless hope that people will understand that these measures are necessary to ensure the company’s profitability and to secure jobs going forward. We will do our utmost to ensure that the restructuring process is carried out in the best possible way, both for those who have to leave and for those who will remain with the company.
Havyard said that the process of specifying how many and who will be made redundant is currently ongoing, and those affected will be informed in the near future.