KUALA LUMPUR – Petronas, the state-owned oil and gas company of Malaysia, plans to reduce its workforce by approximately 10% as part of a company-wide restructuring aimed at cutting costs in response to declining crude oil prices.
The company will let go of over 5,000 employees, with all affected individuals being notified by the end of the year, according to Chief Executive Officer Tan Sri Tengku Muhammad Taufik Tengku Aziz during a briefing in Kuala Lumpur today.
Additionally, promotions and hiring will be paused until December 2026.
In February, Tengku Muhammad Taufik said that Petronas was set to implement workforce reductions as part of efforts to ensure its long-term sustainability.
Tengku Muhammad Taufik said that the national oil and gas company has yet to determine the exact number of employees affected, as the new organisational structure is still being finalised and will only be introduced later this year.
“This is not a retrenchment; it is a right-sizing workforce exercise. The rationale to do this is to ensure Petronas’ survival in the coming decades.
“If we don’t do it now, there will be no Petronas in 10 years,” he was quoted as saying.
He explained that the initiative primarily targets the company’s ‘enablers’—those in administrative roles—who currently number between 15,000 and 16,000 out of Petronas’ total global workforce of 52,000 to 53,000. He noted that this ratio exceeds the industry average.
However, Tengku Muhammad Taufik dismissed claims that the restructuring would favor senior management at the expense of other employees, noting that the restructuring would affect all levels, beginning with management first.
During today’s briefing, Tengku Muhammad Taufik noted that
the margins are shrinking, the fields are getting smaller, emphasising that it will be difficult to achieve dividend targets at current oil prices.
The drop in oil prices, along with decreased production from older assets, presents a significant challenge for the Malaysian government, which relied on Petronas for 10% of its revenue in 2024.
The company is crucial not only to the energy sector but also in funding infrastructure, education, and social programs through its dividends and taxes.
Tengku Muhammad Taufik added that Petronas bases its budget on Brent oil prices of around $75 to $80 per barrel. Currently, the global benchmark is trading near $65, which is a decline of about 13% this year, influenced by trade tensions and OPEC+ increasing production.
In 2024, Petronas reported a 32% decrease in net income, following a 21% drop in 2023. – June 5, 2025