PMX: Petronas Layoffs Not a Crisis, Mostly Contract Staff

Prime Minister Datuk Seri Anwar Ibrahim has sought to play down concerns surrounding Petronas’ decision to cut around 5,000 jobs, saying the majority of those affected are contract workers.

Speaking briefly after Friday prayers yesterday, Anwar said the matter should be viewed in context, indicating that it was not an unusual development given the nature of the roles involved.

His remarks follow Petronas’ announcement on June 5 that it will reduce its workforce by 10% - about 5,000 positions - by the end of 2025 as part of a company-wide rightsizing initiative. The move, described by company leadership as essential to long-term survival, has raised public concern over potential impacts on employment and the broader economy.

Petronas President and CEO Tengku Muhammad Taufik Tengku Aziz stressed that this is not a retrenchment exercise, but a strategic restructuring under what he calls “Petronas 2.0.” He said the company must become more agile and cost-efficient to navigate shrinking margins and uncertain oil markets.

Employees affected by the cuts will be informed by year-end.

Anwar’s downplaying of the issue signals the government’s support for the state-owned oil giant’s internal reform, and appears to reflect confidence that the planned adjustments will not lead to a wider employment crisis.

With around 52,000 employees globally, Petronas is focusing the reductions on support and administrative roles, which currently exceed industry averages. It is reported currently there are 15,000 to 16,000 enablers in the organisation.

The company also announced a freeze on hiring and promotions until December 2026, as it moves to streamline its operations and reshape its workforce. Petronas reported a 32% drop in after-tax profits last year, along with declining margins, which Tengku Muhammad Taufik said could worsen if reforms are not made now.

Source: NST