Saudi Aramco, the Saudi Arabian multinational petroleum and natural gas company, has begun to downsize by slashing hundreds of jobs, starting June 2020. This does not come as a surprise, since oil companies have been employing stringent cost-cutting measures amidst the sharp fall in not just demand for oil, but also in the prices of crude oil. Most of the employees who will be rendered jobless are foreigners.
The Saudi Arabian Oil Company has reduced capital spending for the year, and it is reported that 500 people have already been asked to leave, on the basis of performance. Apparently, the Company goes through a yearly round of cuts.
With its approx. 70,000-srong workforce, Saudi Aramco has been trying to cut costs and adapt to the slump brought about by the pandemic. Having witnessed a 25 per cent fall in its net income in the first quarter, it is trying to go over all its operating expenses, to devise a way to ensure profitability and operational efficiency. As part of its measures, it is now focussing on making the Company more agile, resilient and competitive, so that there is growth in the longer run.
Oil production in Saudi Arabia has dropped to the lowest levels in over two decades. Most oil companies in the Gulf have reduced their workforces by 10 to 15 per cent and gone in for major restructuring in a bid to stay afloat amidst the pandemic. Kuwait has adopted a policy to stop hiring people from outside the nation in the oil sector for at least a year.