Wood Group PSN says it is to reduce rates paid to about a third of its UK-based contractors by about 9% "in response to continuing cost and efficiency challenges affecting the UK North Sea oil and gas sector."
Wood Group, which already made a 10% decrease in onshore contractors' rates in May 2014, and a further 10% decrease in UK contractors rates at Wood Group PSN in December 2014, said the move was in line with competitive market rates.
More than 7500 people work for WGPSN in the UK, including about 600 contractors. The move comes at a time when many are facing job losses, not just pay cuts, as new activity and investment stalled due to the collapsed oil prices.
James Crawford, managing director of WGPSN in the UK and Africa, said: "This is not a decision we have taken lightly, but we believe it is the right one to proactively meet the continuing cost and resourcing challenges affecting the UK North Sea oil and gas sector. Our focus and commitment remains on contributing to the industry's long-term sustainability.
"This adjustment to the rates we pay our UK contractors ensures we continue to be competitive within the marketplace. We highly value our contractors and this measure will allow us to sustain our relationship with these talented people, whilst taking appropriate measures to improve efficiency and reduce cost for our customers."