Aker Solutions, the Norwegian marine engineering group, is preparing for a new round of workforce reductions. This decision comes as a result of a sharp decline in activities following the completion of major oil and gas projects, threatening hundreds of additional jobs.
Workforce Reductions and Financial Forecasts
Aker Solutions' Chief Financial Officer, Idar Eikrem, announced to analysts during the third quarter results presentation that the contractor should expect further adjustments in the workforce, as revenues are projected to decline significantly by 2027. Eikrem referenced a reduction of 200 to 300 job positions at the Verdal workshop late last year and added that similar actions should be anticipated in the future.
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Changes in Operations and Future Outlook
Aker Solutions' CEO, Paal Eikeseth, stated that the company is restructuring its operations as the market shifts towards smaller projects and subsea connections. Aker Solutions forecasts that revenues will decrease by 35 to 40 billion Norwegian kroner (35 to 40 billion dollars) by 2027, while the revenue forecast for this year was 53 to 55 billion Norwegian kroner (5.73 to 5.95 billion dollars).
This warning comes after the restructuring plan announced in January, when Aker Solutions stated that over 500 permanent positions could be affected, including about 300 positions in Verdal. The company reported revenues of 13.5 billion Norwegian kroner (1.46 billion dollars) and a base EBITDA of 1.3 billion Norwegian kroner (141 million dollars) for the third quarter of this year. Additionally, the number of new orders reached 5.4 billion Norwegian kroner (584 million dollars), and the company faced a backlog of 69.3 billion Norwegian kroner (7.49 billion dollars) by the end of September.
Norwegian media have also reported increasing concerns about employment at Aker Solutions' Stord facilities. Union representatives hope to prevent layoffs by transferring workers to marine missions and other projects in Norway. Unions have pointed to the planned Wisting development by Equinor in the Barents Sea as a key factor for securing work in the future.
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