Sharpen those axes

Norway’s Statoil isn’t fucking about in Houston:

Around 70 Statoil employees reportedly were stripped of their jobs with immediate effect at its Houston-area offices in the US after refusing to take voluntary redundancy as part of manpower cutbacks at the Norwegian state-run oil giant.
Ouch!  I don’t think we’re in Norway any more, Olaf!

Retrenched staff – largely drawn from the company’s IT, technical and communication departments within its upstream business – were offered voluntary redundancy packages or alternative positions within the Statoil organisation.

I don’t know what “technical” department means in the context of these redundancies, but I suspect – being lumped in with IT and communications – we’re not talking about engineers here.  I have no idea what a communications department does, and it sounds like one of those entities which you’d only find in a government organisation or an oil company.  At a guess, I’d say they handle press releases, advertising, PR, etc.

However, a company spokesman confirmed that not enough workers applied for voluntary redundancy, and therefore, those who had not found alternative jobs were informed in meetings last week that they had been sacked.

What’s the betting they didn’t take voluntary redundancy because the individuals concerned hadn’t a ghost of a chance of finding a job even half as good?

“Those who were not able to retain their employment then had to meet with career advisors in the human resources department. There they were asked to hand in their identity cards and computer, and were informed of the content of the redundancy package,” the spokesman was quoted as saying.

Ah, now I often wondered what career advisors did in an oil company.  They certainly don’t do much by way of offering careers advice in my experience.  They’re usually trying to persuade you to take a posting in Iraq or Somalia saying “it’s good for your career” without explaining why being kidnapped and beheaded would look good on the CV.  At least now I know that the role of these people is to inform people of the content of their redundancy packages as they walk through the front door on what they thought would be a normal day at the office.  It occurs to me that I may have spotted some additional candidates for redundancy.

“Afterwards they were taken to the elevator by human resources personnel and then led out by security guards.”

Made to dig their own graves, and dispatched with a twenty second burst of machine-gun fire.

Those who were told to leave have been given the same redundancy packages based on length of service as workers who left voluntarily, which the spokesman said “were very competitive in the context of US conditions”.

Redundancy packages can be competitive?  Who knew?  I think he means “generous”.

He also warned there would be a further round of US redundancies to meet the targeted tally of job cuts.

This is a topic I may return to in future: when a multinational company is looking to cut costs, does it make the tough decisions and fire unproductive people regardless of where they are based, or do they let the axe fall where it is easy to fire people (like the US) and overlook places (like Norway) with much stronger labour laws?

Statoil has so far cut 2335 personnel – including 1340 permanent staff and 995 consultants – out of its global workforce, representing a reduction of nearly 10%, since 2013.

That big viking axe has been swinging merrily.  Or has it?

It has largely carried out the redundancies through natural attrition, internal transfers of staff to new positions, cessation packages and early retirement under mostly voluntary arrangements.

The axe appears to be made of foam.  Except in the US.  It would be interesting to see what Statoil did with any staff in Norway who refused to take voluntary redundancy.

The manpower cuts are part of the company’s stated target to make annual savings of $1.7 billion from 2016 in an efficiency drive.

Hard though this is to take for the individuals concerned, the only way to do this is by reducing headcount.  And this, as anyone who’s worked in an oil company over the past 10 years could tell you, ought to be pretty easy to do.

Back in the good old days of a Ukrainian Crimea, a Dubya Bush presidency, a Libya led by Ghadaffi and $120 oil the number of personnel drafted into what laughably get called “support services” in oil companies rose exponentially.  A lot of this was driven by empire building – the more personnel a manager has under him, the higher he scores on the Hay system, or whatever equivalent his employer is using, and that is used to determine his salary.  A lot of it is simply crap management: new positions are created without really looking to see if the current crop of employees are utilised effectively, or even needed at all.  Poke your head into any of the support service departments in an oil company – finance, HR, procurement, communications, IT, travel, diversity, HSE – and you’ll see 20, 30, sometimes 40 people in each, outnumbering those in the drilling department.  The numbers are supposedly justified by the size of the operation and the overall employee headcount, but in my experience the larger the department the worse the service.

Back in the days when I wore short trousers and had bum fluff, I worked in an office of no more than 20 people.  We had an admin. girl working for us who was in charge of, well, all admin.  This included travel.  If one of us need to go somewhere we’d tell this girl – Sarah was her name – where and when we wanted to go, along with any preferences such as routes, etc. and she’d come back to us with a couple of options and prices, and we’d choose the best one.  Then the General Manager would sign off on it, once he was satisfied we weren’t going from Calgary to Houston via Bali with a stopover of 5 days.  The system worked very well.

Fast forward a few years and I was working in an organisation which employed almost a thousand people, and they had a dedicated travel girl.  Flights were booked by her using pretty much the same system as Sarah used in the aforementioned example.  She had email and a spreadsheet and by combining the two she managed to arrange everyone’s flights without too much difficulty.

Fast forward once again and I’m working in an oil company.  This outfit had a travel department, with at least a dozen people working in it, plus a manager or two.  I still have their travel procedure, and it reads as follows:

Step 1.  Traveller sends the (unauthorized) travel request form by e-mail to the Travel Agent directly according to the approved list.  The form must contain the following: name, last name, DOB,  passport number and expiry date, origination, destination, dates of travel, class of travel and purpose of travel.  Travel Agent books 1 or 2 options depending on the availability and according to the policy and sends them to the requester via e-mail with the costs and time limit for issuing tickets. The bookings are kept in the reservation system. However the tickets may be issued only after the authorized travel request is has been submitted.

Step 2. Traveller adds the flight details and costs to the travel request and sends to the relevant managers for approvals [Ed. Line Manager and HR Manager mandatory, plus HSE and others if required for certain types of travel].  The e-mail from the agent must be attached for the manager’s consideration.  Traveller must collect all approvals prior to sending the travel form to Company Travel Department functional mail-box.

Step 3. Company Travel Department ensures that form is properly filled in, agent’s itinerary and all relevant approvals are attached and sends the form to travel agent for issuing tickets, booking hotel and transport with copy to traveller.

Step 4. Travel Agent issues tickets, books hotels and transport and confirms the arrangements to the traveller. Traveller contacts the agent directly if there are any questions regarding the travel. If the travel plan is revised a revised revised travel request must be submitted to Company Travel Department.

Step 5. Traveller collects tickets in person from Company Travel Department.

So the procedure requires that every highly-paid manager, engineer, technician, and specialist runs around emailing travel agents, getting quotes, filling out forms, getting managerial approvals, submitting forms, and collecting tickets.  Meanwhile, let me reiterate in its entirety what the dozen or so staff employed by the Company Travel Department contribute during this process:

Company Travel Department ensures that form is properly filled in, agent’s itinerary and all relevant approvals are attached and sends the form to travel agent for issuing tickets, booking hotel and transport with copy to traveller.

That’s right: they check the form is filled out properly and forward it to the Travel Agent.

Anyone who thinks oil companies should not be firing people by the thousand isn’t taking this downturn seriously.



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