Total cut 180 jobs, sell $5 billion assets
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Total to cut 180 jobs, to sell $5 billion assets

8:38 AM, 14th February 2015
Total to cut 180 jobs, to sell $5 billion assets

PARIS, FRANCE: France’s Total is to cut 180 jobs at Britain’s Lindsey oil refinery and embark on a wider restructuring of its lossmaking plants in France, as it accelerates plans to dispose of billions of dollars of assets after a plunge in crude prices. The energy group said it could not rule out compulsory redundancies at Lindsey in Lincolnshire, in contrast to its French refineries, where no workers will be laid off.

Total, the last of the big six oil majors to issue results, reported fourth quarter adjusted net income of $2.8 billion, down 17 per cent compared to the same period in 2013.

This performance was at the top end of analysts’ forecasts, but the company took a $6.5 billion impairment charge on its Canadian oil sands business, US shale gas and troubled European refining operations. That charge and other one-off items led to a headline loss of $5.7 billion for the fourth quarter, against a profit of $2.2 billion one year ago.

Total confirmed it would cut capital spending this year by 10 per cent, to between $23 billion and $24 billion, as it seeks — like its rivals — to shore up cash flows and cover dividend payouts. The group’s shares closed up almost 1 per cent at €47.35.

Total said under Patrick Pouyanne, its new chief executive, it would accelerate and deepen a cost-cutting programme initiated by his predecessor, the late Christophe de Margerie. This would include disposals of $5bn of assets this year, including some in the North Sea, where Mr Pouyanne said Total was investing “almost zero” in mature fields.

He announced a hiring freeze across the group and plans to cut staff numbers at Total’s headquarters by 15 per cent by 2017. These measures would contribute to a decline of 2,000 in overall employee numbers this year. Total said its “strong and immediate response” to the fall in oil prices would generate $8 billion in cash this year, reducing its “break even” price — the minimum level at which it produces oil profitably — by $40 a barrel.

“Rather than lose skilled workers, Unite believes that oil companies should look to the future and maintain a skilled workforce ready for any upturn. We will of course be discussing the proposed job losses with the company and our members and, rather than cut jobs, we are ready to make alternative proposals,” said Tony Burke, Assistant General Secretary, Total.

© The Financial Times News

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