Oil Price Plunge Takes its Toll as 1,500 Jobs Being Axed by South African Petrochemical Major Sasol

Sasol Ltd, a major player in the petrochemicals domain in South Africa with operations spread globally, has announced that it will be laying off 1,500 people even as it reels under the vagarious oil prices. This will mark the biggest every round of layoffs in the company’s recent history.

And, it is not just employees that will bear the brunt of the erratic oil prices. Shareholders too, will see the company slash its dividend to cope up with low oil prices. Contrastingly, Sasol’s second-half profits in 2014 showed a spike.

According to figures available from public sources, the net profits of Sasol in the six-month period ending December 31 saw a 54% rise, reaching 19.54 billion South African rand, which translates to roughly US$1.62 billion. In 2013, in the corresponding period, the company’s net profits were valued at 12.71 billion rand for total revenue of 99.83 billion rand. In the year-earlier period, Sasol’s revenue was reported as 98.27 billion rand.

The company had made its decision to cut dividend earlier in February 2015. The company had then stated that a 12.5% cut to dividend was on the cards. This, the company said, was an effort to build its cash reserves through the forthcoming 30 months because of the low prices of oil globally.

The company also said that it had accepted about 1,500 voluntary redundancies between June and December 2014 as it was looking to slash payroll costs by a significant degree. The company said that it would continue to carry out ‘refinements’ to its organizational structure over besides effecting a 30-month freeze on hiring activity despite having around 1000 vacancies across the world. Sasol, which is headquartered in South Africa, also has a presence in Europe and the United States.