Royal Boskalis Westminster has made a drastic decision to cut about 650 jobs worldwide, and take more than two dozen vessels out of service in the next two years as a result of the prolonged, weakened market.
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Image from Boskalis. |
Upon completing the company’s fleet rationalization study that was initiated due to the deteriorating market conditions and an expected prolonged period of low energy and commodity prices, Boskalis has decided to remove 24 vessels out of service in the 2016-2018 period, which will ultimately result in global workforce reductions of approximately 650 jobs during the same period. As of now, Boskalis has about 8268 employees, and the job cuts will represent nearly 8% of its workforce.
"After a few very busy years the market outlook for Boskalis has changed drastically as a result of continuing low energy and commodity prices. The volume of work in the market has fallen sharply and this is putting pressure on the utilization rate of our vessels,” Peter Berdowski, Boskalis CEO said. “Because we expect these market conditions to persist in the coming years it is essential that we adapt the size and composition of our fleet to this new reality.”
Of the 24 vessels, 10 of vessels will come from the company’s dredging division, and 14 will be removed from the offshore energy division. The vessel cuts include trailing suction hopper dredgers, cutter suction dredgers, anchor handling tugs and heavy transport vessels.
According to Boskalis, the fleet rationalization will be implemented through the scrapping, sale and lay-up of vessels. The average age of the vessels earmarked for scrapping or sale is in excess of 30 years. Vessels offered for scrapping will be dismantled at certified shipyards in accordance with the Hong Kong Convention and Boskalis' own standards.
“We are fully aware that this intended decision is drastic and that it will have a major social impact. While we will try to absorb the work force reduction through attrition and redeployment wherever possible, compulsory redundancies unfortunately look to be unavoidable,” Berdowski said. “A reduction of the number of vessels and jobs is however necessary to ensure that Boskalis remains healthy going forward."
Of the approximate 650 jobs that will be cut, in terms of composition, Boskalis said it concerns a cross-section of nationalities, with around 150 Dutch staff on Dutch payroll being affected.
“Where possible the workforce reduction will be absorbed through attrition and redeployment. Despite this, compulsory redundancies cannot be ruled out. Boskalis has requested the formal opinion of the Dutch Works Council and will invite the trade unions to consult on a social plan in the short term,” the company said.
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