Malaysia’s state-owned oil and gas giant, Petronas, announced plans to reduce its workforce by approximately 10%, equating to more than 5,000 employees, as part of a broad restructuring effort to curb costs amid declining crude prices.
The company’s CEO, Muhammad Taufik, revealed during a briefing on Thursday that affected staff will be notified progressively throughout 2025. In addition to the layoffs, Petronas will implement a hiring freeze until December 2026.
“The margins are shrinking, the fields are getting smaller,” Taufik explained, highlighting the difficulty of meeting dividend targets given the current oil price environment.
The downturn in global oil prices, combined with diminishing output from aging assets, presents a significant challenge for the Malaysian government, which depends heavily on Petronas. In 2024, the company contributed roughly 10% of government revenue through dividends and taxes, funding critical infrastructure, education, and social programs.
Petronas typically budgets its operations based on Brent crude prices between $75 and $80 per barrel. However, the global benchmark currently trades near $65, down nearly 13% this year amid rising trade tensions and increased output from OPEC+ nations.
The financial impact is clear: Petronas’ net income dropped 32% in 2024, following a 21% decline the previous year, underscoring the ongoing pressures facing the energy sector in Malaysia.
