Polarcus Ltd. has launched an action plan to streamline the organization and adjust operational capacity to align with market conditions and the near-term outlook, according to a statement from the company.
In late March the company announced plans to implement a $15 million cost reduction plan. To meet this goal, the company has decided that its sales and marketing will be maintained in Houston, London, Dubai and Singapore. In addition, the operational organization, both onshore and offshore, has been reduced to manage the anticipated fluctuation in activity levels.
These steps should reduce the company’s operating costs by about $7 million. A one-off associated cost of approximately $2 million is expected to be recognized in Q2 2020.
The main elements of the measures include:
- A streamlined organization with a 20% headcount reduction, principally through redundancies
- Permanent and temporary compensation and benefit adjustments, including a permanent salary reduction of 10% in base salary at senior levels effective October 1
- Activity levels in marine seismic acquisition over the near-term remain low with limited visibility on future projects. However, based on regular discussions with key clients and indications of a more robust oil price through H2 2020, seismic demand is expected to improve during 2021.
Polarcus CEO, Duncan Eley commented: “The extent of the global economic crisis over the past three months has been profound. The further organization changes we have made respond to the deteriorated market conditions and position the company for the future.”
“Based on regular conversations with our client base across the globe, I am confident that the industry will see activity levels increase through 2021. Polarcus will enter this phase as a leaner and more responsive organization with an established foundation for future success.”
To contact the author, email bertie.taylor@rigzone.com.
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