On Track With Announced Merger Initiatives

The merged Aker Solutions will win projects in the global market, including delivering developments related to renewable energy. To succeed in being competitive, an important objective is to improve productivity, realize synergies and cut costs. The structure of the merged company will be simplified, have a leaner and more agile organization, with fewer leaders on every level.

Already before the merger, both companies have this year implemented significant cost reductions. This includes initiatives such as rightsizing of the organization to match activity levels, reduction of overhead costs, reduction of investment levels, optimized footprint in terms of offices and facilities and increased use of digitalization tools. The new top management group is also reduced by 40 percent, from 17 to 10 positions.

"We operate in competitive markets. Our ability to maintain long term development of operations depends on our success with sustaining sound margins and a healthy financial platform," said Kjetel Digre, chief executive officer of Aker Solutions. "This means that we must adapt to a significantly leaner organization for management and administration and have a larger share of the employees in roles for execution of projects for customers." 

This process is in line with the information provided when the merger was announced on July 17, 2020, when Digre said: "We will reduce our overhead costs by 30 percent or NOK 1.5 billion on an annualized basis compared to 2019. The number of own employees in Aker Solutions will be around 15,000 compared to about 18,800 at the end of 2019 for the previous Aker Solutions and Kvaerner organizations combined."

Through 2020, both companies have already implemented most of these workforce reductions, both within administrative functions and other units. The remaining reduction of overhead costs before the end of the year will be around 350 positions. The majority of these will be in Norway.

The company will consider if some of the affected personnel have relevant competence which may enable transfer to work in projects executed for customers. It is premature to estimate any number of actual staff reductions at the end of this process before such options have been discussed with each individual.

ENDS