New York-listed tanker owner International Seaways has handed termination notices to a significant number of holdover staff from the acquired Diamond S Shipping now that the latter's tonnage is operating in third-party pools.
Seaways chief executive Lois Zabrocky confirmed an unspecified number of job cuts in response to a query from TradeWinds, but said in an email message than more than half the Diamond holdovers would have the option to stay on.
"We committed to keeping all staff below the C-Suite [level] through the end of 2021, and we have been able to advise the team that we have asked about 60% of the Diamond S team below the C-Suite to stay on board," Zabrocky said.
The Seaways boss declined to quantify the number of former Diamond S staffers who are in the sub-C-Suite category.
It has been known since the Diamond S takeover was announced that senior management would not survive the combination, but the cuts to rank-and-file staffers are new.
Seaways in July completed the $2.2bn all-stock acquisition of Connecticut-based Diamond S, which was founded by shipping veteran Craig H Stevenson Jr and formerly chaired by legendary investor Wilbur Ross.
The combination created an initial fleet of 102 tankers including three VLCC newbuildings to be delivered, stamping Seaways as the second-largest US-listed tanker owner by vessel count and third-largest as measured by deadweight tonnes.
Diamond S contributed 64 vessels, including 13 suezmaxes, one aframax and 50 MR product tankers.
However, Diamond already had been operating most of the products tonnage in Norden's Norient pool. And as TradeWinds has reported, 11 of the suezmaxes have been placed in the hands of Connecticut-based pools operator Penfield Marine.
The outsourcing was bound to put jobs under pressure. Among those understood to have received walking papers are former chief operating officer Sanjay Sukhrani, chartering manager Robin Heath and vice president for operations Jasneet Manaise.
As rumours of the redundancies rippled through the market in recent days, there were also reports that some jobs would be retained and some perhaps working on a consulting basis.
Zabrocky said in her message that management had told staff it would advise them within September about plans for the combined company.
"We have been very impressed with the high level of professionalism of the former Diamond S staff," she added.
One source in the tanker market said the cuts, while to be expected, were being handled compassionately.
"There's a significant period of notice extending to the end of the year – they're handling it the right way," he said.
It was determined under the acquisition terms that Seaways' management team, which includes Zabrocky and chief financial officer Jeff Pribor, would be the surviving executives.
Zabrocky acknowledged the help of Stevenson, who is advising her in a consultancy role for six months and continuing on as a board member.
She also praised former Diamond chief financial officer Kevin Kilcullen, also assisting with "integration efforts" through year's end.
With its diversified fleet in both crude and clean products categories, Seaways traditionally has deployed its tonnage in third-party pools across vessel classes, where Diamond had been more of an integrated operator prior to selecting Norden to manage its MRs.
