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Offshore Logistics Announces Restructuring of United Kingdom Operations
LAFAYETTE, La.--(BUSINESS WIRE)--Oct. 30, 2003--Offshore Logistics, Inc. (NYSE: OLG) (the "Company") announced today that it has begun a restructuring of its United Kingdom based operations designed to reduce costs and promote operational and managerial efficiencies. Management believes these measures are necessary in order to remain competitive in the North Sea offshore helicopter market, given the current weakness in oil and gas industry activities in that market.
As a part of the restructuring program, the Company will reduce staffing levels by approximately 75 positions, or 11%, of its United Kingdom workforce over a six- month period. The Company will incur approximately $5.2 million in severance and other restructuring costs. However, the reductions will generate approximately $1.0 million in savings during the remainder of fiscal 2004, increasing in fiscal 2005, to approximately $4.6 million on an annualized basis, primarily from decreased salary costs. In addition, the Company is considering changes to its defined benefit pension plan to limit future service accruals through the use of a defined contribution arrangement and is currently consulting with employees regarding this matter. These changes will result in a reduction of benefit costs related to future service provided by employees, the effect of which has not been considered in the savings quantified above. Finally, in order to better align core competencies and management resources and increase the chances of success on future contract opportunities, the Company is exploring the possible transfer of its search and rescue and technical services operations into one of its existing joint ventures.
George Small, Chief Executive Officer and President of Offshore Logistics, Inc. said, "We regret the impact these changes will have on our U.K. workforce. However, management has carefully evaluated the Company's operations and has concluded that in order to remain competitive in the North Sea, we must take action now to reduce operating costs and streamline these businesses."
