How Santos Job Cuts and Asset Sales Affect Australian Energy Workers

Santos plans to cut about 400 jobs, which is 10% of its total staff, as profits fall by 25%. This is a significant change for the company's operations.
By Newsroom | Business, Energy |

Santos, a significant energy company, is preparing to cut approximately 10% of its workforce and is considering the sale of certain assets. This move comes as the company faces a notable decrease in profits, attributed in part to lower fossil fuel prices over the past year. The company has stated that the outcome of these strategic reviews will not be known until their completion.

Background and Company Operations

Santos is the second-largest oil and gas producer in Australia. The company's operations include major growth projects such as the Barossa gas project off Darwin and the Pikka oil project in Alaska, both of which are transitioning into production. Santos views natural gas as a critical energy source that burns more cleanly than coal and can provide reliable power to supplement renewable energy sources. The company anticipates that demand for gas will increase over the next decade, driven by population growth and rising living standards in Asia.

Workforce Reductions and Financial Performance

The planned workforce reduction is expected to affect around 400 of Santos' workforce, which comprises just over 4,000 employees. This decision follows a reported 25% drop in the company's underlying profit to $818 million for the calendar year 2025. Soft commodity prices are cited as a factor contributing to this profit decline.

Strategic Review of Domestic Operations

Alongside the job cuts, Santos is initiating a strategic review of its Australian operations. This review will evaluate whether some domestic projects can compete effectively for capital investment against other high-priority assets within the company's portfolio. Analysts have suggested that potential asset sales could include projects in the Cooper Basin, Western Australia, and the Narrabri gas project, which is valued at $3.6 billion. The timeline for the completion of this review has not been specified.

Corporate Restructuring and Leadership Changes

This period of review and potential divestment occurs as the company integrates its operations following significant past events, including a large takeover. In late 2021, Santos promoted Anthea McKinnell to Chief Financial Officer (CFO) as part of a broader corporate restructure. McKinnell succeeded Anthony Neilson, who moved to the role of Chief Commercial Officer, playing a part in overseeing the integration of Oil Search, Santos' largest acquisition at that time.

Market Reaction

Following the announcements, Santos shares saw a slight decrease, falling around 2.5% to $6.50 in early afternoon trading on the day the news was published.

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  • Key Information:

  • Workforce Reduction: Approximately 10% of staff, around 400 employees, will be cut.

  • Profit Decline: Underlying profit fell 25% to $818 million in calendar year 2025.

  • Strategic Review: A review of Australian domestic assets is underway to assess capital competition.

  • Potential Sales: Assets in Cooper Basin, Western Australia, and the Narrabri gas project have been flagged.

  • Key Projects: Barossa gas project and Pikka oil project are moving into production.

Sources

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Frequently Asked Questions

Q: Why is Santos planning to cut about 400 jobs?
Santos is cutting about 10% of its workforce, around 400 jobs, because its profits dropped by 25% to $818 million in 2025. This is partly due to lower oil and gas prices.
Q: What Australian assets is Santos reviewing and why?
Santos is reviewing its domestic projects, like those in the Cooper Basin, Western Australia, and the Narrabri gas project. They want to see if these projects can get enough money to grow compared to other big projects the company has.
Q: How will these job cuts and asset reviews affect the energy sector in Australia?
These changes mean about 400 energy workers might lose their jobs. Also, some Australian energy projects might be sold, which could change who owns and runs them in the future.
Q: When will we know the results of Santos' asset review?
Santos has not said when the review of its Australian operations will be finished. The company is looking at which projects get money to grow.
Q: What is Santos' main business and future outlook?
Santos is a big oil and gas producer in Australia. They are working on new projects like Barossa and Pikka. The company believes natural gas will be needed more in Asia over the next 10 years.