600 Maritime Jobs Lost Amid Low Oil Prices

Rolls Royce Engineer

Published May 18, 2015 11:45 AM by The Maritime Executive

The Rolls-Royce marine unit is the latest group announcing job cuts amid increasing pressure of low oil prices. 

The British engineering group said it would cut 600 jobs in its Norwegian-focused marine business in response to the lower oil price, a move it said would have a "broadly neutral" impact on 2015 profits. The company said that from 2016, the job cuts in marine would help generate 25 million pounds ($39 million) of benefits.

Employing 6,000 people, the unit builds propulsion systems, winches and anchors for ships, and depends on oil and gas-related customers for about 60 percent of its business. "The effect of low oil prices means we have to continue to look for further efficiencies," Rolls-Royce Marine president Mikael Makinen said in a statement on Monday.

Between June 2014 and January of this year the price of Brent oil collapsed from $115 a barrel to $45 a barrel as supply swamped the global market. It was trading at around $67 a barrel on Monday, well below its 2011-14 average of around $108.

Earlier this year A.P Moller-Maersk announced it would cut 200 jobs in its Maersk Oil Unit and Royal Dutch Shell said that it would see a reduction of at least 250 employees in its UK North Sea operations. Additionally, BP, Chevron and Conoco Phillips have all seen jobs slashed amid falling oil prices. 

Half of the 600 jobs Rolls-Royce job cuts would be in Norway, where the Marine unit's main manufacturing facilities are located, with the other half at the company's other global locations, Rolls-Royce said.