Raw material prices hit the giant. Santos will lay off 10% of its staff

The Australian energy giant Santos is struggling with the worse economic situation – the company recorded a 25% decline in net profit for 2025 and announces the dismissal of every tenth employee. Despite the difficult situation on the global raw materials market, the company focuses on radical cost optimization in order to restore financial stability.

The main reason for such poor financial results were weakened prices of energy raw materials on global markets and lower sales volumes of gas and oil. Although the company remains a key energy supplier to Asian markets, including China and Japan, the worse economic situation has clearly had an impact on its financial condition.

In response to the deteriorating results, the company's management decided to restructure. Santos plans to lay off approximately 10% of its workforce in order to optimize operating costs and adapt the company's structure to the current market situation. Company representatives explain that the job cuts are necessary in view of the completion of key phases of some development projects and the need to maintain financial discipline in uncertain times.

$45 the new break-even point?

Despite the decline in profits, company president Kevin Gallagher emphasized that the company managed to keep production costs relatively low. The company aims to break even at $45-50 per barrel. This strategy is intended to ensure operational stability for Santos even in the scenario of long-term low raw material prices.

Investors are closely following progress in the company's key projects that are likely to improve its results in the coming months. Santos confirmed that production from the new oil fields is scheduled to start at the end of the first quarter of 2026. Full production capacity and stabilization of production in these fields are expected in mid-year, which should translate into increased revenues and improved sentiment among shareholders.

Despite a difficult year, the company declares that it remains focused on providing value to its shareholders. Maintaining solid cash flows will allow for further dividend payments, although their amount will depend on the pace of improvement in the global energy market. Analysts indicate that 2026 will be a transitional period for Santos, in which the effects of cost cuts and the launch of new production will determine its return to the growth path.

Prepared by JM

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