BREAKING: Santos Limited, a major player in the oil and gas sector, has just confirmed that it will cut 400 jobs, impacting one in ten employees as the company seeks to “rightsize” its operations. This decision follows a 25% drop in underlying profits, now reported at $898 million for the calendar year 2025. The announcement comes amid a backdrop of declining commodity prices that have severely affected the industry.
The layoffs will affect approximately 400 of Santos’ 4,000 employees, as the company transitions key projects like Barossa and Darwin LNG from growth phases to standard operations. CEO and Managing Director Kevin Gallagher stated, “As these major growth projects come to an end… we are targeting a headcount reduction of around 10% to rightsize the business.” This urgent move reflects the company’s struggle to maintain profitability in an increasingly challenging market.
Santos reported a decline in sales revenue, dropping to $4.9 billion in 2025 from $5.4 billion in 2024, signaling a significant downturn that prompted the drastic staffing changes. Despite the challenges, Gallagher expressed optimism about cost management, highlighting that the company’s production costs are at their lowest in a decade, thanks to a disciplined operating model.
In early trading, Santos shares fell by about 2.5%, settling at $6.50. Investors are reacting to the wider implications of this news, as the company faces scrutiny over its financial performance and future growth plans. With guidance for 2026 remaining steady, Santos aims for sales volumes of 101-111 million barrels of oil equivalent and per-unit costs between $6.95 and $7.45.
This announcement comes just a day after the Federal Court dismissed a lawsuit by the Australasian Centre for Corporate Responsibility, which accused Santos of greenwashing regarding its environmental claims. The court’s ruling clears a legal hurdle for Santos, allowing it to focus on its operational adjustments.
In a statement regarding environmental governance, Gallagher noted the company’s success in achieving its 2030 emissions reduction target five years early, underscoring its commitment to sustainability. “The Moomba CCS project, one of the lowest cost CCS initiatives globally, is pivotal to our emissions reduction efforts,” he said.
Santos will also distribute a final dividend of 10.3 US cents per share, leading to a total annual dividend of 23.7 US cents, equating to 43% of free cash flow from operations. This financial development is crucial for investors as the company navigates its future in a volatile market.
As this situation develops, industry watchers will be closely monitoring Santos’ next moves regarding its workforce and operational strategy. The urgency of these changes reflects broader trends within the oil and gas sector, which is grappling with fluctuating prices and environmental responsibilities.
Stay tuned for more updates as this story unfolds.
