Malaysia’s Petronas to cut 10% of workforce on profit slump

Malaysia’s Petronas to cut 10% of workforce on profit slump.

Petronas, Malaysia’s state-owned oil and gas company, will cut about 10 percent of its workforce in a firm-wide restructuring as it looks to reduce costs due to falling crude prices.

The company will reduce headcount by more than 5,000 people, and all those affected will be informed by the end of the year, Chief Executive Officer Muhammad Taufik said in a briefing in Kuala Lumpur on Thursday. It will also freeze promotions and hiring until December 2026, he said.

"The margins are shrinking, the fields are getting smaller." Taufik said. "It will be challenging to meet dividend targets" with current oil prices, he said.

The oil price slump — coupled with declining output from its older assets — will pose a challenge for Malaysia’s government, which derived 10 percent of its revenue from Petroliam Nasional Bhd., the full name of the company, in 2024. The energy producer not only anchors the nation’s energy sector, but also plays a key role in funding infrastructure, education, and social programs through dividends and taxes.

Petronas sets its budget based on the Brent oil at around $75 to $80 per barrel, Taufik said. The global benchmark is currently trading near $65, down about 13 percent this year, as trade tensions threaten global growth, and OPEC+ restores production.

Petronas’ net income slid 32 percent in 2024, following a 21 percent drop in 2023.