Santos has announced plans to cut about 10% of its workforce as the Australian energy producer reported a sharp fall in annual profit, driven by lower oil and gas prices. The Company confirmed the proposed job reductions as part of a broader strategic and cost review aimed at strengthening returns and protecting margins.
Santos plans a 10% workforce reduction after reporting a 35% decline in annual profit due to weaker oil and gas prices. [Energy Source & Distribution]
Santos Limited said it would reduce staff numbers across its operations and corporate offices. The move follows a 35% decline in annual profit, reflecting softer global energy prices and changing market conditions. Management stated that the Company must adjust its cost base to align with current commodity cycles.
The Company’s leadership outlined the plan while releasing its latest financial results. Executives said the review targets efficiency, capital discipline, and sustainable shareholder returns. The proposed workforce reduction forms a central part of that strategy.
Santos profit falls 35% amid weaker oil and gas prices
Santos reported a 35% drop in annual profit compared with the previous year. The decline followed weaker oil and liquefied natural gas (LNG) prices across global markets. Lower realised prices directly reduced revenue, despite stable production performance.
Management attributed the earnings fall to softer benchmark crude prices and moderating LNG contract rates. Global energy markets cooled after earlier price spikes linked to supply disruptions. As prices eased, margins tightened across the sector.
The Company also recorded lower underlying earnings before interest, tax, depreciation and amortisation. While production volumes remained relatively steady, price movements had a stronger impact on total revenue. Santos stated that market volatility continues to shape its financial performance.
Strategic review targets cost reduction and efficiency gains
Santos launched a strategic review to improve operational efficiency and reduce overheads. The Company aims to streamline decision-making structures and remove duplication across departments. Executives confirmed that workforce changes will support these efforts.
Santos launched a strategic review aimed at improving efficiency and reducing operating costs. [Reuters]
Management said the review covers both Australian and international operations. Leaders are examining procurement, project delivery, and corporate functions. The Company expects the restructuring to lower annual operating costs once fully implemented.
According to Company statements, the proposed 10% workforce reduction will occur in stages. Santos plans to consult affected employees and comply with relevant workplace regulations. The Company indicated that it will provide support to impacted staff during the transition.
Santos job cuts reflect sector-wide cost pressures
The planned job reductions highlight broader cost pressures within the energy sector. Oil and gas producers have adjusted capital spending in response to fluctuating commodity prices. Many companies now focus on cost discipline rather than expansion.
Santos stated that it remains committed to maintaining safe and reliable operations. The Company stressed that production guidance remains unchanged. Management said operational integrity will not be compromised by the restructuring.
Energy analysts note that oil prices have stabilised below earlier peaks. LNG prices also moderated as supply improved in global markets. These conditions have prompted producers to reassess expenditure and staffing levels.
Production performance remains stable despite earnings drop
Santos reported steady production output during the financial year. Core assets continued to operate within guidance ranges. The Company’s LNG projects and domestic gas operations maintained consistent volumes.
Executives emphasised that the earnings decline did not result from operational underperformance. Instead, lower realised prices reduced total revenue. Santos continues to invest in key assets to sustain long-term production capacity.
The Company also highlighted progress on selected development projects. Management stated that disciplined capital allocation remains a priority. Santos aims to balance shareholder returns with investment in future growth.
Board update as Yasmin Allen prepares to retire
Santos also announced that non-executive director Yasmin Allen will retire from the board. Yasmin Allen has served as a board member and chair of the audit and risk committee. Her retirement will take effect later this year.
Yasmin Allen will retire as a non-executive director of Santos later this year. [The Marketing Academy]
The Company acknowledged her contribution to governance and oversight. Allen played a role in guiding Santos through periods of market volatility and structural change. The board confirmed it will begin a search for a replacement director.
Board leadership stated that succession planning remains ongoing. Santos aims to maintain strong governance standards during the transition. The Company did not indicate further changes at board level.
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Outlook focuses on disciplined growth and shareholder returns
Santos stated that it expects energy markets to remain volatile in the near term. Management will continue monitoring oil and gas price trends closely. The Company intends to preserve balance sheet strength and liquidity.
Executives reaffirmed commitment to delivering value to shareholders. Santos plans to focus on projects with strong returns and manageable risk profiles. Cost control will remain central to corporate strategy.
The Company’s leadership said it will provide further updates as the strategic review progresses. Investors will assess how workforce reductions and efficiency measures affect future earnings. For now, Santos has signalled a shift toward tighter cost management in response to weaker energy prices.
Santos remains one of Australia’s largest independent oil and gas producers. The latest results underline the impact of global commodity cycles on corporate performance. Through restructuring and cost reduction, the Company aims to stabilise margins and strengthen its position in a competitive energy market.
FAQs
- Why is Santos cutting 10% of its workforce?
Ans. Santos announced a 10% workforce reduction as part of a strategic review. The company aims to reduce costs and improve efficiency. Lower oil and gas prices have reduced earnings, which prompted management to adjust operating expenses.
- How much did Santos’ profit fall?
Ans. Santos reported a 35% decline in annual profit. Weaker oil and LNG prices reduced revenue compared with the previous year.
- Will the job cuts affect Santos operations?
Ans. Santos stated that it will maintain safe and reliable operations. The company said production guidance remains unchanged despite the planned staff reductions.
- How many employees will be impacted?
Ans. Santos indicated that about 10% of its total workforce could be affected. The exact number depends on consultation and restructuring outcomes.
- What caused the drop in Santos earnings?
Ans. Lower global oil prices and softer LNG contract rates reduced realised prices. Although production levels remained stable, weaker commodity prices led to lower profit.
- Is Santos still investing in new projects?
Ans. Yes. Santos confirmed it will continue investing in key projects. However, management will prioritise capital discipline and focus on developments with strong returns.
- Who is retiring from the Santos board?
Ans. Yasmin Allen will retire as a non-executive director. She currently chairs the audit and risk committee.
- How are global energy prices affecting Australian producers?
Ans. Lower oil and LNG prices have pressured earnings across the energy sector. Companies are focusing on cost control and efficiency to protect margins.
- What is Santos’ outlook for the coming year?
Ans. Santos expects ongoing market volatility. The company plans to maintain balance sheet strength and pursue disciplined growth strategies.
- Where does Santos operate?
Ans. Santos Limited operates oil and gas projects across Australia and internationally, with major LNG and domestic gas assets.
