Inside One Of The Biggest Downsizing In The World

I work for one of the largest engineering company in the oil drilling industry. We designed more than half of all the drilling rigs in the world, both onshore and offshore. When I started in this company, the oil price was around 120 USD/barrel and multi-million dollar contracts were just a daily routine. They even stopped serving cake every time we signed a contract: several partner/spouse of the workers complained about the visible weight increase of their loved ones. The work conditions were fantastic and the workload overwhelming.

File:Buque de perforación (Drill Ship) PACIFIC KHAMSIN, año 2013, fondeado en Tenerife.JPG
How 200 to 400 million USD of offshore equipment looks like.

However, as they say in Italy, “it is not always Sunday”. In the autumn 2014 the oil price gradually, but inexorably fell down from 120 to 45 USD/barrel. Suddenly, oil companies were making one third of their astronomical profits.

The causes are still debated among analysts, oil workers and politicians. Someone says that these past 5 years have been a huge bubble and now we are just back to normal. Others say that the entrance of Iran in the oil market (a country with gas and oil reserves among the largest in the world), is keeping the prices low. Some others say that the OPEC is keeping the prices low to kick out of business the american shale oil companies. I do not know who is right, but i know that all have been somehow wrong, as the Oil&Gas industry is a complex mixture of political, economical and technological factors.

File:Brent crude oil price 1988-2015.svg
Oil price from 1988 to 2015. Across three months, oil price went from 110 to 45 USD/barrel

Said that, the inflow of contracts slowed down and my company started struggling in providing value for its shareholders. Money is the driving force of all business, so a massive cost saving campaign started in the beginning of 2015. Literally all the costs you could imagine of my company were listed, studied, broken down into sub-components and reduced. The first cut was on the travelling expenses. As a worldwide company, we were travelling quite a lot. Poland, Singapore, China, Korea, USA, Brazil and so on. Online meetings were preferred and travels were allowed only when of vital importance. We went from flying business class to economy-plus and finally to economy. The canteen service was reduced and squeezed, as well as facilities, benefits and all nice-to-have things. However, we all knew that was just the beginning…

So, surprisingly (but not so surprisingly) we all got the feared email in our postbox: The company will proceed with a massive workforce reduction. One third of all employees will be sent home by the end of the year.

In Norway alone, that meant 1’500 job cuts. Nobody expected that.

Our competitors were already at their second workforce reduction, so we had a glimpse on what would be next: more cost savings, more jobs cut.

At first, our brain started rushing on analyzing what would be the selection criteria or who was safe and who was at risks. Others simply started looking for new jobs right away.

Such process usually takes an enormous amount of work from the management and the human resources, thus we needed to wait some time before knowing anything about the process. First, the workers needed to be classified and categorized. Then, the workload was assessed and compared to the resources available. The unions needed to be included, in order to define the way to go and make it transparent and legal. Finally, the downsizing criteria were selected and the “redundant” areas were defined. Managers started being visibly exhaust and gloomy. Smiling and welcoming faces of talented leaders became serious and shady. From a gold era in which they were asked to empower and develop people, now they were asked to rank and classify them. Luckily, it is common opinion that my company handled this process in a fair and professional way, giving strong support to the employees affected by the downsizing. This was crucial in order to avoid a complete disaster.

September 2015. The downsizing starts. I kind of expected a simultaneous mail to all 1500 employees stating that they were fired. That would have been painful but quick. But reality is more complex, so the hatred mails started arriving one by one, at indefinite intervals. Some colleagues were fired the 3rd of September, others the 7th or the 15th and so on. During a normal work day you could see a colleague standing up and say to all “hey, I got the mail”. Most people decided to keep it quiet for a while, while others kept it secret until they just went away “for holidays” and never came back.

That mail was an invitation for a “discussion meeting” where basically you were given your last opportunity to save yourself and explain why you were needed. Some people managed to talk their way out. Of course, for everyone safe, someone else would need to be kicked out. This is why the process was so inconstant and prolonged.

What most impressed me is how the work environment changed. From a heaven of innovation, shared wealth, work satisfaction and good friends, the office became slowly a completely different environment. Relationship between colleagues started degrading and social events were reduced. Enthusiasm, energy and creativity were threatened by frustration and worry.

As we expected, the first round was followed by a second and a third. The Norwegian office where I work went from 5000 employees to barely 1800. That is an astonishing 64% workforce reduction. Globally, the company lost 18’000 employees this year alone. Buildings were shut down, workshops closed, and offices merged. Other people left by themselves, seeking better opportunities.

Somehow I managed to remain in the company. Now, the life in the office proceed almost as normal. The workload is not anymore overwhelming but new things to do are popping up every day.

Life outside the office instead just crashed, with only a couple of friends left in the city. Job uncertainty changed my “5-years” plan to a “let’s-see-if-i-got-the-mail” plan. But that’s a story for a later post.

Thanks for reading.

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