Company Revamp

Company Revamp
Student’s Name
Institution
Company Revamp
Oil prices at the market have been fluctuating for quite some time creating a state of uncertainty for McDermott International. The company deals with designing and installing of structures for gas and oil companies including the deep water and offshore companies McDermott International Inc. (2017). The company’s gas and oil projects are priced at fixed size setting its business volatile including orders, the timing of projects, profitability and revenues putting projects at high risk of being executed. This has resulted in the company receiving a rating that is underweight after being downgraded from Ba3 to B1 in a recent move.
Therefore, McDermott International Company requires various measures to be undertaken to save it from sinking even as the business future becomes uncertain day after day. First, the company needs to cut down on the many deep-sea and offshore the oil and gas projects currently undertaking. By cutting on the projects, the level of cost of the projects will be reduced even as it looks into future certainty.
Previous, these projects are undertaken by the company most of them have been undertaken at the sizeable fixed price which has led to the business becoming more volatile. The company, therefore, needs to consider making prices more flexible. The price needs to downsize to levels that can be affordable to reduce the risk of project cancellation.
There should be a consideration by the company to reduce the workforce.

With the risk of canceling projects looms, the reduction of the workforce will see the company manage to save roughly between $140 million to $165 million in a year. The company avoids running into unnecessary debts due to o unpaid wages should business completely sink.
It is important that the company considers suspending dividends within the period of low oil pricing until the market becomes stable. The suspension will the cost cut to allow the company sail through hard times. Dividends suspension can last until the market becomes better for oil and gas.
Reference
McDermott International inc. (2017). The McDermott Strategy: Global Presence, Local Expertise