Fortescue simultaneously slashes green hydrogen strategy and 700 jobs

The company has announced its intentions to cut 4.5 percent of its global workforce

Fortescue recently stated that it plans to cut around 700 jobs, translating to about 4.5 percent of its workforce worldwide, as it substantially trims down its plans for becoming a massive green hydrogen player.

The company has decided to slim down to remain more agile

The Australian iron ore mining company had been steadily building its green hydrogen ambitions in recent years.  Now, it is reorganizing and restructuring to remain “lean, impactful and agile,” it said in a recent statement.

Apple Paget, the acting chief financial officer of the company, will be taking on the role of permanent CFO as a step to help ensure the health of the company’s financial side.

Founder and CEO of the company, billionaire Andrew Forrest, has been developing a strategy to move the business away from iron ore, which remains the core revenue source. At the same time, a number of its experienced senior staff members have left the company in recent years, calling into question the leadership style and overall strategy at the company.

Despite cutting back on green hydrogen, Fortescue says it’s committed to clean tech

Though Forrest stated that his company remains “resolute” to its clean tech vision commitment, it is placing on hold its target for producing 15 million metric tons of green hydrogen per year by 2030. The intention is to wait until electricity prices fall.

This step could potentially cause a slowdown in the development of its technology throughout this area.

Forrest pointed out that the wars in the Middle East and Ukraine have sent global energy prices skyward. He noted that this trend has made the production of green hydrogen fuel on a large scale unfeasible, according to a report in the Australian Financial Review.

“In that environment you’re not going to bring in major sources of green hydrogen, which relies on cheap energy prices,” he said in that publication.

A sharp change in direction

Until this recent announcement, Fortescue had been aggressively moving its way into green hydrogen and other forms of clean energy. This was particularly true in recent months. At the close of last year, it had greenlighted investments of about $750 million across three years for an H2 hub in the United States, as well as a 50-megawatt renewable H2 project in Australia, and a green iron trial commercial plant in that country as well.