Seadrill Ltd (NYSE:SDRL) Announces Job Cuts After Lost Contract From BP plc (ADR) (NYSE:BP)

Seadrill Americas Inc., the U.S. division of London-operated Seadrill Ltd (NYSE:SDRL), has announced slashing jobs, in order to overcome the loss it suffered due to lost contract from BP plc (ADR) (NYSE:BP). The letter of jobs cut was sent by the company to Texas Workforce Commission.

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Seadrill Ltd (NYSE:SDRL) will slash a total of 159 offshore jobs. Apart from this, four of the onshore jobs at West Sirius Rig will be eliminated by Seadrill. This process will begin from this month onward until a few months to go.

Lost Contract hurts Seadrill

BP Exploration & Production Inc. recently conveyed to Seadrill that it does not intends to work with the company on the unit services related to mobile offshore drilling in the region of Gulf of Mexico on West Sirius Rig. The contract being cancelled means that the rig will kick off its preparations in finally killing the operations there and thus, will be kept out of service for period of 3-6 months in time to come.

The contract being cancelled by BP is a major blow to Seadrill Ltd (NYSE:SDRL). This is clearly visible as the company, in its letter to Texas Workforce Commission said clearly that the contract was a major one with its “principal client.” The letter was called Worker Adjustment and Notification Act.

The affected employees to be offered transfers

It is however speculated that Seadrill might offer the chance of transfer to a few of its affected employees. However, it is clear that none of the employees have been given an extension yet. No employee who will be affected by job cuts is represented by the union. Also, there are no bumping rights reserved for them, which means that the affected employees at the higher position do not have the opportunity to take up the jobs at lower ranks.

The company has however said that even though these job cuts are irrevocable, but the employees who shave had a satisfactory past work record will be considered for re-hire during other job requirements in future.

Culver Stinson

Culver Stinson

Stinson is US Markets Daily’s Senior Producer for News & Public Affairs.