Tullow Oil Kenya has announced plans to cut its workforce in what it said was an effort to lower its wage bill to a more sustainable level.

In a notice issued yesterday, the firm said it had to “review and assess its financial performance and business operations” to meet the demands of the business.

The British firm had once banked on the Kenya oil project to drive new growth, but delays in output across the East African region’s oil fields have forced it to seek an exit plan.

In the notice signed by Kenya managing director Martin Mbogo, Tullow said it would be cutting jobs across all levels of the organisation, affecting contract, expatriate, permanent and fixed-term employees.

It, however, called on its staff to a consultative meeting to discuss measures that would “mitigate the effects of the redundancy”. Tullow has spread its staff layoffs across its various offices around the world, and plans to slash a third of its employees in efforts to cut administrative costs by a fifth, or around Sh2 billion, according to Reuters.

After a string of production downgrades, Tullow expects its production to shrink to 75,000 barrels per day (BPD) this year. It targets free cash flow of $150 million (Sh15 billion) this year at an oil price of $60 (Sh6,000) a barrel. The firm’s share price plummeted 64 per cent last year.

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