IHC outsources, triggering Norwegian job losses

Royal IHC says it is fine-tuning its strategy as a result of “persistently poor market conditions,” resulting in around 425 job losses.

Offshore staff

SLIEDRECHT, the NetherlandsRoyal IHC says it is fine-tuning its strategy as a result of “persistently poor market conditions,” resulting in around 425 job losses. This reduction will be in both permanent and temporary contracts in the Netherlands, mainly in indirect and support positions.  

Employees were said to be informed with further details through staff meetings.

The company said its section-building activities will be further outsourced in order to respond to competition from Eastern Europe and Asia. IHC will maintain the shipbuilding slipway in Krimpen as its main slipway. The Kinderdijk slipway will be maintained as a reserve.

In addition, the executive board is being reduced to two members: CEO Dave Vander Heyde and CFO Arie Vergunst.

“Economic developments in the markets in which IHC operates continue to be extremely turbulent,” the company said in a statement. “As in 2015, the oil price and increasing international competition in particular have led to a significantly lower order intake in the first nine months of 2016 than anticipated.

“IHC has already announced that it expects to remain below the forecast sales budget for the whole of 2016. The associated low level of turnover makes it necessary to drastically cut costs, particularly in support positions within the organization.”

The company said it expects to emerge from this downsizing process as a smaller and healthier organization and will be focusing on boosting its sales activities. In addition, IHC units that are currently thriving, such as Beavers, IQIP and Services, will be given space to maximize their potential for growth.

IHC said it will also invest in consolidating staff expertise and knowledge in the design, engineering, assembly, and commissioning of vessels and equipment. Furthermore, international activities will be significantly expanded, with the company pointing to its Brazilian base as an example of how it has grown its international market position.

“By expanding its international activities, IHC is responding to its customers’ growing preference for more ‘local for local’ design and construction. This will also ensure that existing local market potential is properly exploited,” it said.

The Works Council and trade associations have been notified about the plans for downsizing, and IHC said it has agreed with these associations on a series of dates to discuss the timeline and conditions.


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