Petronas, Malaysia’s state-owned oil and gas company, recently announced plans to slash 10% of its workforce. This cut is the biggest staff cut in more than 10 years. The company announced this surprising move last week, attributing the profound decision to a changing energy paradigm and a host of domestic issues.
The layoffs will affect employees in dozens of departments across the company. This privately held company has interests in both oil extraction and the downstream sector, including refining and retail distribution. This decision is based on a new and changing energy market that is increasingly prioritizing sustainability and alternative energy sources.
Petronas, referred to for its robust operations, operated the only gas station in Putrajaya, their capital located a mere 30 km west of Kuala Lumpur. The firm’s staff is getting smaller. In this decision, the NLRB is actually in tune with scores of energy companies that are reassessing their workforce requirements as a result of volatile oil pricing and a growing focus on green energy projects.
In recent years, Petronas has come under increasing pressure to pivot in response to evolving consumer demands and environmental regulations. The firm is laying off about 25 percent of its staff in support of a new overall direction. This decision is intended to cut costs and improve productivity in the face of external economic pressures.
Industry analysts say this workforce reduction signals the same trends we’ve seen in other supermajors. These companies are staring down the very real challenges of making the transition to a more sustainable world. The layoffs might be a sign of increasing friction within Malaysia’s energy sector. Competition and regulatory challenge — the dynamic nature of both — is what is pushing these changes.
Yet, the long-term effect of these layoffs on employee morale and company culture has yet to be addressed. Stakeholders and employees alike are watching intently. They’re curious to find out what the effects of this decision will have on Petronas’s future performance and standing in the industry.