Wintershall DEA wants to cut 800 jobs in Germany after the completion of the ongoing merger process. This was announced by the two merger partners.
More than half of the workforce reduction at the future oil and gas production company is planned for the Group headquarters in Hamburg and Kassel, and another part for production sites. As a result, according to the works council, every second job of the new company in Germany is eliminated. Wintershall DEA will cut another 200 jobs in Norway, bringing the total to 1,000 out of 4200 jobs worldwide, according to the announcement.
Wintershall and DEA sealed their merger last September and expect to complete the process in the first half of 2019. This will create Germany's leading commodity group with around five billion euros in sales, which is involved in oil and gas production projects worldwide.
Wintershall DEA will initially be 67 percent BASF and 33 percent Letter One, a parent company of Russian oligarch Mikhail Fridman. Later, the BASF share should rise to 72.7 percent before an IPO is planned.
Union announces resistance
The union IG BCE announced opposition to the plans. "In their ambition to make the new company nice for the IPO, the boards have gone far beyond the goal," said Michael Winkler, who sits on the board of the Wintershall for the union. "We can not and will not put up with that." A downsizing of this magnitude threatens to jeopardize the operation of the companies.
According to the company, the DEA site in Wietze, Lower Saxony, is to be closed; the existing laboratory and drill core storage moves to Barnstorf, also in Lower Saxony.
Until June 30, 2020, Wintershall and DEA have guaranteed the waiver of redundancies and site closures. The works council is skeptical as to whether this will succeed after all, especially as the Hamburg location already has several rounds of redundancies behind it.
Wintershall DEA is only supposed to grow abroad
"The plans weaken the location of Germany," said the chairman of the DEA General Works Council, Günther Prien. Jobs would be moved abroad, to Mexico, Stavanger or Abu Dhabi, although the corresponding work could be done in Germany.
The background is also the exhaustion of conventional oil and gas resources in Germany, which would lead in the future to a decline in domestic funding. Thus, the planned growth of the company takes place exclusively abroad. This is also due to the fact that fracking technology, with which further oil and gas reserves could be mobilized, would not be socially accepted in Germany.
The new company plans to increase its oil and gas production by 40 percent by 2023 from 575,000 to 800,000 barrels of oil equivalent per day and save 200 million euros a year on operations, investments and personnel.