ABERDEEN-headquartered energy services firm Wood has said “employee reductions are being made” in order to tackle the effect of COVID-19 pandemic.
The company has set out the range of measures it is taking in response to the impact of the virus on its business.
Temporary furloughing, headcount reductions, unpaid leave and operational salary reductions are among them, with a focus on redeploying workers wherever possible.
On top of this, Wood’s board and senior leaders, as well as certain other employees, are taking a 10% cut in base salary which is expected to save around £32.2million.
A dividend to shareholders, recommended at the end of last year, is also being withdrawn which was expected to cost £128m.
Capital expenditure is being cut in some areas to save another £16m – £20m.
The firm’s order book at the end of February was £6.4bn, but Wood said it expects some of that to be postponed and that new order intake will be slower due to the impact of the coronavirus outbreak and lower oil prices.
Robin Watson, Wood chief executive, said: “Like many companies, Wood is being affected by the unprecedented event of Covid-19 and its impact on the global economy – an event compounded by the sharpest decline in oil price in 20 years.
“Our strategy has led to a substantial broadening of our business across energy and built environment markets, reducing our reliance on any one industry or sector. Our proven track record of leveraging our flexible, asset light model in response to changing market conditions stands us in good stead.
“Today we announce a series of actions which keep our people safe and healthy and will further protect our business and our stakeholders by reducing cost, protecting cashflow and ensuring continued balance sheet strength.
“This includes the Board’s prudent and appropriate decision to withdraw its recommendation to pay the proposed 2019 final dividend.”
The Wood annual general meeting, planned for May 7, has been postponed due to the virus, with details of a revised date to be provided “as soon as possible”.