Woodside staff, cost cuts revealed
UPDATE 7.45am: Woodside Petroleum has spelt out details of its huge organisational restructure driven by cost cutting, with full-time equivalent staff numbers cut by 15 per cent over the past year, management positions reduced by 18 per cent and the number of third-party contractors slashed by 70 per cent.
As part of managing director Peter Coleman's push to remodel Woodside's cost base but also build up in-house skills sets, the company has also forced through an average 27 per cent cut to the rates being paid to contract staff, whose numbers have fallen from 295 in 2012 to 88.
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Combined with the cuts to contractor numbers, Woodside's associated spend has fallen from $120 million a year in 2012 to $32 million.
But the move in-house has not avoided big staff cuts as well, with the number of full-time jobs cut from 4100 to 3500 over the past year, and there are expectations of more losses to come.
Spelling out the HR changes at Woodside's annual investor day in Melbourne today, vice president people and capability David McLoughlin said organisational layers within the company had been cut by about eight to seven and spans of control, a measure of internal operating efficiency, increased from about five times to 6.5.
Woodside's cost cutting program began well before the collapse in the oil price, which began in earnest late last year, as the Perth company tried to reset its cost base, though those efforts have been accelerated, and in many cases aided by, the downturn in macro-economic conditions.
Senior vice president, spend reduction initiative, Hendrik Snyman, said Woodside was using all three value levers - price, process and demand - for its push to reset the company's cost base.
More than 500 initiatives had been executed to achieve targets of a 10-plus per cent across the board cut to rates and contract prices and the vendor base was being slashed from more than 3000 to about 800.
Mr Snyman cited the example of achieving a 33 per cent or $69 million saving last year on Woodside's maintain repair operate (MRO) category, to $210 million including big cuts in fuels (21 per cent), valves (40 per cent) and chemicals and gases (37 per cent).
Woodside shares closed yesterday at $34.33.
