URGENT UPDATE: Santos, the oil and gas giant, has just announced significant layoffs impacting 400 employees as part of its strategy to “rightsize” the business. This decision follows a troubling 25% decline in underlying profit, which fell to $898 million for the year 2025. The news comes as Santos grapples with declining commodity prices that have severely affected revenue.
The layoffs represent roughly 10% of Santos’ workforce, which totals just over 4,000 employees. CEO Kevin Gallagher stated that this reduction is necessary as major projects like Barossa and Darwin LNG transition from growth phases to core operations. He emphasized, “As these major growth projects come to an end… we are targeting a headcount reduction of around 10%, rightsizing the business.”
Santos’ revenue took a hit, dropping to $4.9 billion in 2025, compared to $5.4 billion in the previous year. The company delivered its first cargo from Barossa and Darwin LNG in early 2026, achieving this milestone within budget and six months ahead of schedule. Despite this progress, Gallagher noted that weak commodity prices overshadowed production gains, leading to the urgent need for workforce reductions.
In an optimistic tone, Gallagher highlighted that the base business has performed exceptionally well, maintaining production levels with the best unit production costs in a decade. He pointed out that Santos is financially positioned to explore new opportunities while rapidly decreasing debt.
Stock market reactions were swift, with Santos shares plummeting 2.5% to $6.50 early this afternoon. This news follows a recent court ruling that dismissed a case against Santos regarding allegations of greenwashing related to its environmental claims. The Australasian Centre for Corporate Responsibility had argued that Santos misled shareholders about its environmental track record, but the court found in favor of the company.
Gallagher also praised Santos’ environmental governance, stating, “We achieved our 2030 emissions reduction target of 30%, five years early.” He emphasized the importance of the Moomba CCS project, which has become a cornerstone of Santos’ strategy for emissions reduction.
In light of these developments, Santos will pay a final unfranked dividend of 10.3 US cents per share, bringing the total annual dividend to 23.7 US cents, which represents 43% of free cash flow from operations.
As Santos navigates these challenges, all eyes will be on the company’s performance in the upcoming year. Guidance for 2026 remains unchanged, with sales volumes projected between 101-111 million barrels of oil equivalent and unit costs estimated at $6.95 to $7.45.
Stay tuned for more updates as this story develops.
