Oil & Gas PSUs laid off 15,700 workers in the past 6 years

10 May 2024 , 11:26 AM

In six years, state-run oil and gas businesses laid off 15,700 workers, or 14% of their workforce, despite a nearly twofold increase in revenue. The impact was greatest on non-managerial jobs.

According to data from the oil ministry, the number of employees at state-run oil and gas enterprises fell from 110,000 six years before to the end of 2022–2023 to 94,300. In six years, the exploration and production, marketing, and R&D sectors lost 20–24% of their workforce, compared to only 3% lost by refineries. The pipeline industry saw a 7% increase in employment.

The number of non-management positions, which include craftsmen, clerks, and supervisors, decreased by 25% while executive and managerial jobs decreased by 6%. The exploration and production sector experienced the biggest decline in managerial jobs, with a 27% decrease. Managerial employment at refineries increased by 15%. 16% fewer managers were employed in the R&D departments.

At state-owned oil companies, the percentage of management positions in total employment climbed from 54.5% to 60%, a 5-percentage point rise. In the categories of marketing (16%), R&D (3%) and refining (8%), the number of management employment grew. However, it fell by 5% for the exploration and production industry.

News reports attributed the decline in direct employment at state-run businesses to a number of factors, including increasing outsourcing, a greater uptake of technology, a rush of retirements, particularly during the Covid years, and a lack of replacements.

In the six fiscal years ending in 2022–2023, capital expenditures by state-run oil corporations were ₹6,80,000 Crore.

According to an industry official who talked to ET, “employment is not directly proportionate to investments in the oil sector,” and companies sometimes outsource multiple roles in their quest for efficiency.

“With the increasing specialization of employment, it is not possible to have all skill sets on staff. Furthermore, all talents eventually become obsolete,” he added, endorsing outsourcing. “In the past, services were more difficult to mobilize and less readily available. That is no longer the case.

In March 2023, there were 94,000 workers at state-owned companies; 28,000 of them were employed by Indian Oil Corporation and 24,000 by ONGC. At Indian Oil, 58% of all posts were held by executives or managers, but at ONGC, the percentage was 60%.

With 28% of all jobs in the oil business as of March 2023, the exploration and production sector is the largest employer in the sector. Marketing and refining accounted for 26% and 25% of the shares, respectively.

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