Restructuring: OMV to effect EUR400 mn cost cutting; reduction in workforce
European chemical/oil companies are being hard hit by lower oil and gas prices, substantial investments in renewable energy projects, challenges in US tariffs and other geopolitical factors, thereby squeezing their margins, with a few like TotalEnergies, Shell, and BP having announced significant job cuts and investment reductions in recent months.
Austrian oil and gas company OMV is next on the line with a EUR400 million cost-cutting programme, including a significant reduction in its workforce – estimated in the “middle three-digit range”, by the end of 2027 as part of a group-wide review to improve its competitiveness and “streamline operations and portfolio.”
The efficiency measures will increase the company’s flexibility and enhance its long-term resilience amid a volatile market environment, it said.
OMV added it is in “ongoing negotiation” with employee representatives on a currently estimated potential mid-three-digits labour impact in Austria. “Further details will be announced in due time,” it said.
No specific locations or facilities were detailed by OMV in its statement. OMV operates integrated crude oil refineries and petrochemical complexes in Austria, Germany and Romania.
The company’s petrochemical joint ventures Borealis and Borouge were not mentioned in the announcement. In fact, Borealis recently announced a EUR100 million expansion of its compounding plant in Austria http://plasticsandrubberasia.com/IMA/sept2025/expansions-borealis-to-invest-eur100-mn-in-compounding-line-in-austria-walki-adds-printing-capacity-to-meet-demand-for-flexible-packaging.html
OMV said the potential cost savings identified would contribute to the delivery of a EUR500 million improvement in the company’s operating cash flow, which was announced at OMV’s Capital Markets Day in June 2024.
It also added, “OMV Strategy 2030 drives strong progress with significant milestones delivered across chemicals, fuels and energy business segments.
The company will also have a stronger focus on customer experience and higher standardisation through technologies, e.g. AI, digitalisation and automation, it added.
In July, OMV raised its full-year forecast for olefins and polyethylene margins and overall polyolefin sales volumes after seeing better-than-expected chemicals performance in the first half of 2025.
The company’s CEO, Alfred Stern, said, “Future-proofing our business and strengthening our competitiveness are key to continuing to seamlessly serve all our customers and stakeholders. Amid a challenging market and volatile geopolitical environment, we are setting us up for long-term resilience and successfully delivering on our strategy.”
The company is also actively pivoting towards a lower-carbon future, investing in projects like renewable hydrogen and sustainable aviation fuels. However, these ventures are currently less profitable than traditional fossil fuel operations, necessitating cost reductions elsewhere. This highlights the need to fund the energy transition while maintaining profitability in a declining market. The success of this transition will depend on factors like government policy, technological advancements, and consumer demand for sustainable energy solutions.
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