Santos will cut approximately 400 jobs, roughly 10 per cent of its global workforce, as part of a major restructure tied to weaker earnings and a strategic review of its Australian oil and gas operations.
The Adelaide-based producer, Australia’s second-largest listed oil and gas company, said the reductions follow a year of lower commodity prices and rising costs that have pressured margins.
The company employs nearly 4,000 staff across Australia and overseas.
For the 2025 financial year, Santos reported a 35 per cent decline in statutory net profit to US$818 million ($1.15 billion), down from US$1.26 billion in 2024.
Underlying profit, which excludes one-off charges, fell 25 per cent to US$898 million — short of analyst expectations.
The company cited weaker realised oil and gas prices alongside higher input and project costs as the key factors behind the earnings slide.
Chief Executive Kevin Gallagher said the workforce reduction was necessary to align the company’s size with its new operating phase, as several major projects move from construction into production.
He noted that Santos had made substantial investments over the past five years to build long-term growth capacity, and with those developments now coming online, the priority would turn toward boosting efficiency and maintaining strict financial discipline.
Santos is currently bringing two major growth assets online, the Barossa gas project in the Timor Sea and the Pikka oil project in Alaska, both of which are expected to contribute to production in 2026.
The company has set a target to maintain break-even cash flow at oil prices of US$45 to US$50 per barrel through to 2030.
The strategic review of its Australian oil and gas business, announced alongside its full-year results, will evaluate options to streamline operations and “unlock shareholder value”.
Analysts viewed the review and workforce cuts as potential catalysts for renewed investor confidence after a tumultuous 2025, when Santos was the target of a proposed US$36 billion takeover by Abu Dhabi’s state-owned ADNOC.
That deal was abandoned late last year amid reported valuation differences.
Despite the weaker annual profit, Santos lifted its final dividend to US10.3¢ per share (higher than consensus forecasts), signalling board confidence in its balance sheet and cash flow outlook.
The company said the decision reflected reduced risk following the Barossa start-up and the resumption of exports from the Darwin LNG facility.
Santos remains focused on maintaining investment-grade credit metrics and funding its development pipeline without new equity.
Gallagher, who received 90 per cent of a $6 million long-term growth bonus issued in 2021, said the company’s performance through to 2030 will hinge on operational discipline and selective portfolio management.
The board also confirmed that long-serving director Yasmin Allen will retire at the end of this week after nearly a decade of service.
Market analysts suggested that the cost cuts and review could improve Santos’s valuation ahead of potential asset sales or new merger proposals, as the company positions itself for a lower-carbon, lower-cost energy landscape.
