Wellstream workers at risk of redundancy as owners GE Oil & Gas start cost cutting

25 staff at the Walker Riverside base of Wellstream International are at risk of redundancy as its parent company grapples with falling oil prices

Wellstream
Wellstream

A leading oil and gas operation is proposing to cut jobs at its North East base as part of a restructuring exercise.

Subsea pipe manufacturers Wellstream International are in discussions with affected members of staff, after owners GE Oil & Gas launched a cost-cutting programme across their worldwide operations.

Around 25 jobs are at risk of redundancy at the firm with 17 to go, GMB union organiser Stephen Thompkins told The Journal.

Wellstream’s owners, GE Oil & Gas, confirmed that restructuring across the group would impact the Newcastle operation, based at Walker Riverside in Newcastle.

A spokesman for the firm said: “GE Oil & Gas has started restructuring projects to reduce the cost structure of the business.

“This includes proposals to reduce employment, which is a decision we don’t take lightly but one we must undertake for the long-term health of the business.

“We will provide affected employees with resources to transition to other employment, at GE or an outside company.

“Taking this action now will enable us to run our business more efficiently, remain competitive in a challenging environment and better meet the needs of our customers.”

The restructuring news came as revenues were announced for the GE Oil & Gas business, which show sales fell 8% in the three months to the end of March 2015, to $4bn. Profits at the division also fell by 3% in the same period, from $446m to $432m, as it grappled with a steep drop in crude oil prices which has rocked the industry.

Wellstream, which was acquired by GE in 2011, employs around 590 people and specialises in the manufacture and installation of flexible pipes for the oil and gas industry.

The firm’s 2013 accounts show pre-tax profits fell from £40.7m to £7.8m, after making heavy investments into research and development as well as a £1.9m royalty payment.

Stephen Thompkins, GMB regional organiser, said: “We’re trying to assist workers in this difficult period. The larger group of members have deferred pay talks until July because of the predicament the business was in.

“We are aware there have been a number of issues, but this news still comes as a shock. Our members felt they would be in a stronger position in June and July to talk about pay, rather than now.

“The issues with oil and gas have affected productivity and there is an opportunity to restructure. Management and admin roles are affected and that means there is a lot of experience that is going to go here.

We will be sitting down and seeing where we can go. We’ll try to get that 17 number down, and see if we can slot people into other positions.”

GE Oil & Gas employs about 45,000 workers across the world.

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