Muhyiddin shocked over Petronas layoffs, presses for sustainability plan

Summary

• PN chairperson Muhyiddin Yassin says the government must urgently present a comprehensive plan and strategic direction for the national oil and gas industry, following the announcement of layoffs in Petronas.

• The former premier also reminds the government to exercise prudence in utilising Petronas’ funds amid mounting national debt and a fragile economy.

Perikatan Nasional chairperson Muhyiddin Yassin has urged the government to urgently present a comprehensive sustainability plan for Petronas, along with a clear strategic direction for the national oil and gas industry.

The former prime minister made this call after expressing shock over reports that Petronas plans to lay off 5,000 employees - approximately 10 percent of its workforce - and voiced concern over the ongoing dispute with Petroleum Sarawak Bhd (Petros).

He also reminded the government to exercise prudence in utilising Petronas’ funds, particularly at a time when national debt is mounting and the economy remains fragile - factors that further strain the company’s cash flow.

Commenting on the impending layoffs, Muhyiddin acknowledged that they primarily affect contract employees, but noted that many of them have served Petronas for a considerable period.

“They have families to support. Mass termination without offering them specific training opportunities to generate income and sustain their livelihoods is an inhumane act.

“It is only appropriate that the layoffs be carried out in phases, after these workers are trained and their livelihoods are relatively secured. This includes entrepreneurship training and capital assistance so they can venture into businesses suitable to their qualifications and skills.

“Funds typically allocated to support bumiputera entrepreneurs should be used to help them become self-reliant. The government must also share the responsibility in addressing this issue,” he added.

Challenges mount

Muhyiddin said it cannot be denied that Petronas is facing significant challenges, noting that last year, it recorded a post-tax profit of RM55.1 billion, a decline of 32 percent compared to RM80.7 billion in the previous year.

“Given the global challenges faced by Petronas, stemming from falling world oil prices and the trend towards renewable energy, Petronas needs a long-term plan to ensure the sustainability and competitiveness of this state-owned company.

“Additionally, the unresolved dispute between Petronas and Petros regarding gas distribution rights in Sarawak not only affects Petronas’ income but also impacts the entire oil and gas industry in the country,” he said.

Muhyiddin also cited a news report indicating that several oil and gas companies in Malaysia experienced revenue declines or posted losses in the first quarter of 2025.

One of the main factors, he noted, was the reduced utilisation of vessels and delays in Petronas commencing exploration activities, largely attributed to its ongoing dispute with Petros.

“If this situation continues, not only will Petronas and its workers face uncertainty, but the entire ecosystem of companies and workers in the national oil and gas industry will be affected. There are 70,000 workers involved in the oil and gas equipment and services industry in Malaysia.

“As a state-owned company that contributes significant dividends to the government and plays a crucial role in national development, the interests of Petronas and its workers must always be protected by the government,” he added.

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