[MALAYSIA] Malaysia’s state-owned energy giant, Petronas, is facing a critical juncture in its future. The company, which employs nearly 50,000 people, will need to make significant workforce reductions in order to survive, its CEO has warned. Without these necessary changes, Petronas could cease to exist in just 10 years, according to Tengku Muhammad Taufik Tengku Aziz, the company’s president and chief executive officer.
In a statement, Tengku Muhammad Taufik explained the drastic measures, citing the increasing challenges in the global energy sector and the need for the company to adjust in order to remain competitive. "The rationale to do this is to ensure the survival of Petronas in the coming decades," he said, underscoring the importance of strategic workforce cuts. He further emphasized, "If we don’t do it now, there will be no Petronas in 10 years."
While the specific number of affected employees was not disclosed, the company's restructuring—referred to as a “right-sizing” exercise—has caused concern about the future of Petronas' vast workforce. It is clear, however, that without these significant adjustments, the company would be unable to withstand the pressures of the rapidly changing global energy market.
Petronas, which plays a crucial role in Malaysia's energy sector, has historically been a major contributor to the nation's economy. However, as the energy industry evolves, Petronas faces growing challenges, particularly from the global transition toward renewable energy sources and increasing operational costs. The company’s strategy, according to Tengku Muhammad Taufik, aims to streamline operations and enhance efficiency to ensure it continues to contribute to national development.
This announcement comes at a time when the energy sector worldwide is undergoing a transformation. The demand for fossil fuels is decreasing, while the emphasis on green energy solutions such as solar, wind, and hydrogen is increasing. Petronas, traditionally a major player in oil and gas production, is grappling with the need to diversify its energy portfolio and embrace the future of renewable energy.
However, despite the urgency, the CEO clarified that the restructuring would not involve any deal between Petronas and the Sarawak state government on local gas distribution. He stated that the decision was made independently and aimed solely at securing the company’s future.
The news has raised questions about how large companies in traditional energy sectors are adjusting to new realities and what it means for their workforce. It also highlights the broader issue of job security within industries that are being disrupted by technological advancements and shifting market demands.
As Petronas navigates these challenges, the company will need to balance the need for operational efficiency with the well-being of its employees. The long-term survival of the company is at stake, and it remains to be seen how the workforce will react to these proposed changes.
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