Pertamina to slash employee numbers

Pertamina to slash employee numbers

Moch. N. Kurniawan, The Jakarta Post, Jakarta

State-owned oil and gas firm Pertamina plans to slash its work
force by more than a third despite the company recognizing the
"drastic step" would have a high social cost, a senior executive
says.

Pertamina upstream director Iin Arifin Takhyan said on Tuesday
that 10,000 jobs would go, reducing the workforce to 16,000. Some
2,000 employees would be let go every year as part of moves to
form a limited liability company, Iin said.

"We don't want to take the drastic (downsizing) steps as it
will spark a higher social cost," he told reporters after a
seminar on the prospect of oil and gas industry.

He added the company would also limit its recruitment program
to help reach its retrenchment target.

Under the new oil and gas law, which came into force in
November, Pertamina will lose its decade-long monopoly in the
country's oil and gas sector and must transform to a limited
liability company in two years.

The transformation process is aimed at making Pertamina more
efficient and profitable.

For decades Pertamina has been known as a company which has
too many employees and one that has been plagued with corruption.

Under its transformation plan, Pertamina expects to form a
holding company, not only for several subsidiaries in upstream
and downstream activities in the oil and gas sector, but also for
geothermal power plants and petrochemical plants.

In the long term, Pertamina also plans to float shares on the
stock exchange.

Iin said its management production sharing unit would likely
to be transferred to a special body called the executive board.

"This means the workers will also be transferred to the
executive board," he added.

The executive board is an independent body which will be
established in a year by the government to replace Pertamina's
role in supervising the upstream oil sector following the
implementation of the new oil and gas law.