A subsea engineering firm cut staff numbers by nearly half as it dealt with a dramatic decline in the oil and gas industry but has said the firm is back on the road to profitability.

Tonbridge-based Jee, which carries out underwater projects for oil and gas firms, made an operating loss of £631,000 last year, having made an underlying profit of £658,000 a year earlier.

The firm – whose clients include BP, Chevron, Tullow Oil, Scottish Power Renewables and SSE – suffered about a 30% decline in revenues to around £5m as it contended with a 30% drop in consultancy work and about an 80% fall in training operations.

It comes as its customers grapple with tighter margins prompted by the global fall in oil prices, which fell from around $110 a barrel to about $25 last year. It has recovered to about $55 a barrel today.

As a result, Jee has cut staff numbers to 34, down from 55 the previous year and 67 the year before that. It employs about 25 people at its offices in Kent.

Director Jonathan McGregor said: “Our company is a leading indicator of the industry. If there is a downturn then operators cut their training budget and consultancy expenditure.

“It has been a really tricky time. We were hit very hard and very fast. It was difficult to react.

“We had to do multiple rounds of redundancy. We thought we had got to the bottom then there was another precipice.

“We have also had to look at the terms and conditions of employment. We had to adjust salaries and pensions.”

Despite the “challenging year”, Mr McGregor said the company has been profitable since May last year and is likely to hit its budget for this year.

He said: “We will be a bit smaller than last year but the company is sustainable and hitting our sales target.

“For the first time in two years we have replaced an engineer who left. We have been discussing the potential to take on graduates in September.

“We want to reward people who have stuck with us by promoting internally and filling those jobs at graduate level.”

The troubles faced by Jee have been felt across the industry. Its rival Xodus made losses of about £20.2m last year, with revenues down 33%.

Mr McGregor said: “The company has shrunk dramatically but our headcount reduction isn’t unusual in the industry and our revenue reduction has been less than other companies.

“The way the team has pulled together has been the difference for a company like Jee.

“My team has been absolutely incredible. They have responded so well.”

Future growth is coming from the North Sea and west Africa. Jee hopes it will soon secure its first contract in Indonesia for a number of years.

It aims to shift its work ratio from about 70% in the UK and 30% international to nearer 60% UK and 40% overseas.