5,000 Retrenched As Petronas ‘Reinvents’ Itself

Malaysian state energy giant Petronas will shed 10% of its workforce by the end of 2025 as part of a company-wide transformation effort aimed at adapting to difficult market conditions, primarily caused by falling crude prices.

The job cuts, affecting approximately 5,000 employees, are part of an ongoing “right-sizing” process, Petronas president and CEO Tengku Muhammad Taufik Tengku Aziz announced at a press briefing in Kuala Lumpur on June 5, according to ICIS.

The affected employees will be notified by the end of the year. The move is part of the company's strategic shift toward what it calls “Petronas 2.0,” which will involve changes in structure, organization, and work processes.

“Petronas 2.0 will be run differently, organized differently, will have different work processes, and to move towards that, we will have to correct the work process,” Tengku Muhammad Taufik said.

As reported by The Straits Times, Petronas will also implement a freeze on promotions and hiring until Dec 2026 as it aims to create a leaner, more agile organization.

Despite the potential for oil prices to climb to US$100 (RM423) per barrel, Petronas is positioning itself to operate efficiently regardless of price fluctuations. Tengku Muhammad Taufik noted that profit margins have become increasingly compressed.

He further added, “our profit before tax margin was around 35% to 40%, today, it is between 25% and 38%. These margins are going to shrink further.”

In 2024, Petronas posted a 32% decline in after-tax profit year-on-year to RM55.1 billion, as revenue dropped by 7%. Its petrochemicals division, Petronas Chemicals Group, saw net profit fall 30.7% to RM1.18 billion, even as sales increased by 7% to RM30.7 billion.

In a separate report according to Reuters, Tengku Muhammad Taufik reaffirmed the company’s commitment to its Canadian operations, where it is involved in both upstream and LNG projects.