PETRONAS to reduce workforce by 10% as part of transformation drive

About 5,000 employees are expected to be affected in stages from 2026, as the company pushes for leaner, more competitive operations.

Petroliam Nasional Berhad (PETRONAS) is set to reduce its workforce by 10%, impacting approximately 5,000 employees, as part of efforts to cope with challenging operating conditions and rework its organisational structure under the “Petronas 2.0” transformation.

According to Bernama, President and Group CEO Tan Sri Tengku Muhammad Taufik Tengku Aziz shared during a media briefing on 5 June 2025 that the decision was made in light of ongoing operating challenges, particularly the decline in crude oil prices and narrowing profit margins. Affected employees will be informed in stages starting next year.

"PETRONAS 2.0 will be run differently, organised differently, will have different work processes," he said, adding that to move towards that, "we have to correct the work process."

Per Bernama’s report, the national oil and gas company is aiming to become a leaner, more agile operation, even in scenarios where oil prices surge to US$100 per barrel. At the time of reporting, Brent crude was hovering near US$65. This is roughly 13% lower than earlier in the year. The report noted that PETRONAS had initially based its 2025 budget on prices between US$75 and US$80 per barrel.

Despite this, the company continues to post strong earnings. In the financial year ending 31 December 2024, it recorded an estimated net profit of RM55.1bn. However, this marks a 31.7% drop from the RM80.7bn reported in the previous year, which Bernama reported was largely due to lower average realised prices and tax adjustments in 2023.

Cited by Bernama, Tengku Muhammad Taufik further explained that while PETRONAS historically operated with a profit before tax margin of 35-40%, those margins have now tightened to 25–38% and could fall further as oil fields become smaller and harder to monetise.

"So, the value-added (PETRONAS) 2.0 has to transform into an organisation that monetises molecules commercially and competitively, not just at home but also abroad," he was quoted as saying.

HRO has reached out to Petronas for more details and will update this story accordingly.

Lead image / PETRONAS' website