Beach Energy to axe 30 per cent of employees as new CEO delivers on cost cutting pledge
The new Beach Energy boss had vowed to drastically cut costs, with the loss of up to 200 jobs the latest ‘difficult’ decision for CEO Brett Woods.
Beach Energy, majority owned by billionaire Kerry Stokes, will axe 30 per cent of its workforce, as new chief executive Brett Woods delivers on his promise to drastically cut costs.
Mr Woods in February vowed to drive a corporate turnaround after a spate of missteps which has tested the patience of investors.
In a stunning announcement, Beach announced a restructure will see 30 per cent of employees axed.
The Australian understands around 200 people will lose their jobs with the bulk of redundancies to be confirmed within a month.
Mr Woods said the decision was difficult but necessary.
“Decisions about headcount reductions are not made lightly as we are highly cognisant of the personal impact organisational change can have on individuals and their families,” he said.
“To minimise the personal impact we are committed to implementing the new structure as soon as possible.”
Investors warmly greeted the announcement with shares jumping around 5 per cent in hopes of a long awaited turnaround that has seen a series of chief executives and false dawns as the company struggles to deliver growth.
In 2022, Beach Energy slashed the estimated gas reserves at its LNG export basin near Perth by 11 per cent after the Waitsia Stage 2 drilling campaign.
Mr Woods said in February he intended to streamline the business and he would conduct a strategic review – the first element of which was the job losses amid a broad restructure.
Further announcements from the strategic review are expected later this year.
Mr Woods has, however, wasted little time.
Just weeks into his new role, Beach said new drilling would stop in the Cooper Basin, an historical source of gas located mostly in southwestern Queensland and extending into northeastern South Australia Beach also said it will not continue work on a carbon capture and storage project in the Otway Basin in Victoria.
Mr Woods said the economics of the project do not yet work,
While the cost costing has been well received, if Beach Energy is to turn its fortunes around, it must finish the development of the Waitsia Stage 2 project in Western Australia, which was hampered by the collapse of developer Clough in 2022, but is central to the company’s plans.
Beach Energy is hoping to profit from a looming gas shortage across Australia’s east coast, but the company has repeatedly tested the patience of shareholders and investors who have been desperate for the company to finally deliver on rosy projections.
The Waitsia project is being developed as a joint venture between Beach and Japan’s Mitsui & Co.
Beach has begun a review of the project.
Mr Woods’ immediate impact comes as Beach’s largest shareholder, Mr Stokes tightens his grip on the company.
Beach Energy late last year names Seven Group chief executive Ryan Stokes as interim chairman of the board, just weeks before the company ousted its former head Morne Engelbrecht after a little more than a year in the job,
Mr Woods is now Beach’s third chief executive in three years.
Mr Engelbrecht replaced Matt Kay who also left abruptly after Beach Energy in 2021 suffered its biggest ever one-day share market fall when it suddenly slashed its estimate for reserves from the Western Flank oil reserves in northeast South Australia, triggering class action lawsuits.
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