Qatar Petroleum (QP) has cut 1,000 jobs as the state-owned firm adjusts its business model to shrinking revenues amid slumping oil prices, according to the Washington-based World Bank.

In its Mena Quarterly Economic Brief published in July, the World Bank said low oil prices has affected various sectors of Qatar’s economy. Qatar restructured its government in January this year and austerity measures have already been implemented to counter wasteful spending, overstaffing and lack of accountability.

“Other signs of cheap oil harming the economy was the growing cost of QP and Royal Dutch Shell, which led to the latter’s pulling out of the $6.4bn Al-Karaana petrochemicals project,’’ the report said. “QP also laid off about 1,000 employees,’’ the World Bank added, without specifying the source of information or the period when the job losses occured.

QP did not respond to MEED’s emailed request for comments on the World Bank report. 

The World Bank is the first body to confirm the lay-offs in Qatar’s flagship petroleum holding company. There was media speculation in local and international press earlier this year, with differing numbers appearing in reports, some putting the job losses at as high as 3,000.

Saad Sherida al-Kaabi, the company’s president and CEO, in June 2015 did not confirm the number of job cuts, but said QP has wrapped up its eight-month restructuring process and has no immediate plans to lay off more staff.

Al-Kaabi described the reorganisation as a “right-sizing” to create a more streamlined company.

“I am ready to take any questions, but not the number of employees whose contracts were not renewed. It will hurt sentiments, which I do not want,” he was quoted as saying at a press conference.

Al-Kaabi said the company’s subsidiaries, including RasGas, QatarGas, Qatalum and Qchem, were reviewing their staff requirements based on business needs and will make their own decisions on staffing, according to a report by the local Gulf Times.

Earlier this year, news agency Reuters citing unnamed sources reported that the job cuts to the organisation’s 14,000-strong workforce could involve losing up to 30 per cent of employees in some areas.

As part of the cost-cutting measure, the company has also decided to divest its non-core businesses such as insurance, catering and service companies. At the beginning of the last year, QP confirmed it will absorb its wholly-owned investment arm Qatar Petroleum International (QPI).

Qatar, like the rest of its GCC peers, relies heavily on the sale of hydrocarbons for revenues. Oil prices have fallen from a mid-2014 peak of more than $110 a barrel to close to $50 a barrel as the supply glut persist. Following years of surpluses, Qatar is estimated to run a budget deficit of $8bn, equivalent to 5 per cent of GDP in 2016 — the smallest among the GCC countries. “Yet, given that the budget planners in Doha calculated oil at $48 a barrel, Qatar’s deficit may actually increase,’’ said the World Bank report.

To plug the deficit, the government has ordered state-owned institutions such as Qatar Museums and Al-Jazeera to reduce their programming and lay off expatriates. Qatar Foundation’s budget has been slashed by 40 per cent, with the government making significant cuts at Western academic institutions in Education City.

Last December, Sidra Medical & Research Centre cut hundreds of jobs and officials have put the brakes on plans to roll out a national healthcare scheme, the World Bank said in its report, adding that the Qatari Tarsheed initiative penalises households for lighting buildings at night.