Pertamina to lay off up to 40% of its staff next year

Pertamina to lay off up to 40% of its staff next year

JAKARTA (JP): State-owned oil and gas company Pertamina
announced on Tuesday that beginning next year it would gradually
reduce its workforce by 30 percent to 40 percent in a move to
streamline its massive organization.

Pertamina president Baihaki Hakim said Pertamina's employees
would be cut to an "ideal" number of 18,000 from the present
26,000 in a retrenchment program that would be carried out within
five years.

The retrenchment, he said, was part of Pertamina's
restructuring, for which a presidential decree would be issued in
the near future.

"So, it's a process of streamlining or downsizing, and the
impact is that there will be a reduction of between 30 percent
and 40 percent in structural positions," Baihaki told reporters
after meeting President Abdurrahman Wahid at the state palace.

He said the President had expressed general approval of the
plan, and that Pertamina's new organization could be "launched"
in early January.

Baihaki added that there was no rush to reduce the number of
employees as about 1,000 retire each year.

Baihaki further assured that employees at Pertamina's
head office would not be affected by the policy.

He said he would rely more on the natural retirement process
in streamlining the organization, but would welcome any
employees' request for early retirement.

"Well, our team is laying out an interesting program, so if
they feel they do not have a future with us, they can take early
retirement," Baihaki explained.

He also said that he would cut the board of directors from
seven to six.

At present, Pertamina's board of director comprises a finance
director, a general affairs director, an exploration and
production director, a shipping, port and communication director,
a processing director, and a distribution director.

Baihaki said the company would combine its different
directorates based on upstream and downstream sectors.

The upstream sector covers all oil and gas activities
involving exploration, exploitation and production of oil and
gas.

While the downstream sector is related to marketing, trade and
distribution of oil and gas products.

Based on the plan, he said, Pertamina would combine its
shipping, port and communication directory, and its general
directory under the trade directory.

"The whole process might take about five years," Baihaki said.

He said that after completing the restructuring, Pertamina's
status would be equal to that of any other state company.

"The last stage will be to go public ... maybe after three
years we will be ready to go public," he said.

The restructuring of Pertamina, he continued, was different
from that of state electricity company PT PLN, where
restructuring was based more on its financial difficulties.

"Pertamina is focusing on how to improve its performance, to
become more efficient and more competitive," Baihaki explained.

The government hopes to turn Pertamina into a world class oil
and gas company, similar to that of its Malaysian counterpart,
Petronas.

Pertamina has recently submitted an oil and gas bill to the
House of Representatives, under which it would, among other
things, lose its monopoly to distribute fuel in the country.
(bkm/byg)