Petronas’s ongoing dispute with Petroleum Sarawak Bhd (Petros) is putting more pressure on the energy producer amid its company-wide restructuring exercise.
Petroliam Nasional Bhd (Petronas) has announced a 10% workforce reduction, affecting approximately 5,000 employees, as part of its “Petronas 2.0” strategic transformation to address declining crude oil prices and market volatility. The reduction, primarily targeting contract workers and administrative roles (“enablers”), is set to occur in stages starting in 2026, with a hiring freeze in place until December 2026, except for critical positions. This follows a 32% profit drop in 2024 and a 21% decline in 2023, driven by lower oil prices and shrinking margins.
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Muhyiddin said Petronas urgently required a long-term strategy to safeguard its sustainability and competitiveness as a state-owned enterprise, especially in the face of global headwinds such as falling oil prices and the accelerating transition to renewable energy.
“The unresolved dispute between Petronas and Petros regarding gas distribution rights in Sarawak not only impacts Petronas’s revenue, but also destabilises the wider oil and gas industry in Malaysia,” Ex PM Perikatan Nasional chairman Muhyiddin Yassin said in a statement.
Severance Package and Support:
- Market-Competitive Compensation: Affected employees will receive severance packages exceeding statutory requirements, tailored based on years of service and employee category.
- Transition Support: Petronas has established a Transition Council and People Development Committees to oversee talent mapping and placement. Support includes:
- Career coaching and job search assistance.
- Emotional support services.
- Medical assistance programs.
- Upskilling and reskilling opportunities.
- Financial planning guidance.
- External Placements: Petronas is collaborating with government-linked companies to facilitate job placements and offers an entrepreneurship program through the Petronas Innovation Garage for those pursuing business ownership.
- Transparency and Compliance: The process adheres to legal and industrial relations standards, with engagement from the Department of Labour and Department of Industrial Relations.
The restructuring aims to make Petronas leaner and more agile, focusing on cost efficiency and competitiveness amid global energy challenges. Notifications for affected staff will be completed by the end of 2025, with an emphasis on transparency and respect.
For further details on the package or process, affected employees should refer to internal communications from Petronas or contact relevant HR channels. If you have specific questions about eligibility or need more tailored information, please provide additional context, and I can refine the response.