A subsidiary of Switzerland-based Transocean Ltd. (NYSE: RIG) expects to eliminate 75 to 110 offshore jobs in September, the company told the Texas Workforce Commission this week.
The affected employees are all offshore employees who work on Discoverer Inspiration, a drilling rig operated by a Transocean affiliate in the Gulf of Mexico. The employees report to management in Transocean’s office at 1414 Enclave Parkway in Houston, according to the Worker Adjustment and Retraining Notification Act letter Transocean sent to the TWC.
The rig will complete its current operating contract and does not have a contract for additional work, Transocean said. The layoffs are expected to begin on Sept. 15, and the company considers the layoffs to be permanent. However, Transocean might recall some of the affected employees if it secures a new contract for the Discoverer Inspiration, per the WARN letter.
Affected employees will receive a severance package, but bumping rights do not exist, meaning workers with more seniority cannot take jobs from those with less seniority.
Companies working in the energy industry have been announcing layoffs for months. The industry is dealing with problems from both sides of the supply-demand equation. Social distancing as a response to the Covid-19 pandemic has resulted in a massive reduction in demand for transportation fuels, while a price war between OPEC member states and other large, oil and gas producing countries layered on further pressure.
That has resulted in many exploration and production companies making deep cuts to their budgets and thus drilling less. Other offshore job cuts in recent months include London-based Seadrill Ltd. (NYSE: SDRL) laying off up to 135 people over the summer and Pacific Drilling SA (NYSE: PACD) laying off more than 80 people in April. Both have offices in Houston.
By Olivia Pulsinelli – Assistant Managing Editor
Courtesy of The Houston Business Journal