Total may cut jobs after $12bn revenue loss
French oil and gas outfit, Total may downsize its workforce after the company suffered a whopping $12 billion deficit in its revenues forecast.
Consequently, the company stated its plan to adopt a cost-cutting mechanism to match the deficit, while maintaining that it anticipated a $12bn revenue shortfall due to a fall in oil prices occasioned by the novel coronavirus (Covid-19) outbreak.
Job losses have been the trend since the pandemic broke out in many countries in March, although International Oil Companies (IOCs) prefer to refer to as downsizing is one of the potent measures of cost-cutting.
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Chevron, with a similar case of revenues shortfall had already announced the plan to sack over 6000 staff in its global operations.
The latest announcement of $12 billion deficit by Total CEO Patrick Pouyanne is significantly higher than the previous deficit forecast of $9bn.
The increase is expected to force Total to devise deeper cost-cut measures.
According to Pouyanne, Total had expected oil prices to stand at around $60 a barrel this year, but with prices currently at around $30, the company faces a much bigger shortfall.
Reuters quoted Pouyanne as saying in a shareholders’ general assembly meeting: “It is globally at least $12bn that we believe we must cover through our action plan due to the crisis.”
The oil and gas industry has been regarded as one of the worst-hit sectors of the country with oil revenues dwindling beyond expected margins while workers disengagement continues.
It has been estimated by analysts that the current damage caused in the sector by the Coronavirus pandemic can only heal off at the beginning of 2021 as oil prices this year will not be significant.
