Santos Slashes 10% of Workforce as Profits Plummet

Australia's energy sector is facing mounting pressure as Santos Ltd. announced plans to cut 10% of its workforce following a devastating decline in annual profits that underscores the industry's vulnerability to volatile commodity markets.

The country's second-biggest natural gas producer reported net profit of A$818 million ($578.6 million) for 2025, representing a crushing 34% drop from the previous year's A$1.26 billion. The company's underlying profit, excluding significant items, fell 25.2% to A$898 million, painting a stark picture of an industry under siege from declining oil and gas prices.

Santos Managing Director and CEO Kevin Gallagher attempted to frame the workforce reduction as a strategic optimization, stating that "as these major growth projects come to an end and become a part of the base business, and as we deliver on our cost savings objectives, we are targeting a head count reduction of around 10%, rightsizing the business."

The job cuts come at a particularly troubling time for Australia's energy sector, which has been grappling with global market volatility and increasing pressure to transition toward cleaner energy sources. The 10% workforce reduction will affect hundreds of employees across Santos' operations, adding to growing concerns about job security in traditional energy industries.

Despite producing 87.7 million barrels of oil equivalent with unit production costs at A$6.78 per barrel, Santos struggled to maintain profitability in the face of weakening commodity prices. The company's challenges reflect broader industry trends that have seen energy companies worldwide forced to implement cost-cutting measures and workforce reductions.

The timing of these cuts is particularly concerning given Australia's position as a major energy exporter in the Asia-Pacific region. Santos' struggles signal potential broader challenges for the country's energy sector, which employs thousands of workers and contributes significantly to the national economy.

The company's financial difficulties also raise questions about the sustainability of Australia's energy industry amid global market pressures and the ongoing transition toward renewable energy sources. As traditional energy companies face mounting pressure to reduce costs while maintaining operations, workforce reductions may become increasingly common across the sector.

For the hundreds of Santos employees facing job losses, the cuts represent a harsh reality of an industry in transition. The 10% reduction comes despite the company's efforts to maintain operational efficiency and secure new contracts, highlighting the challenging environment facing even established energy producers in today's volatile market.

Sources

1. Santos to Cut Workforce by 10% After Slump in Annual Profit — Bloomberg World
2. Santos' 2025 net profit falls 34% to $578.6m — Yahoo Finance