Andrew Forrest was seemingly possessed by the spirit of hydrogen – now he’s cut 700 jobs and canned FFI

Iron ore baron billionaire Andrew “Twiggy” Forrest’s Fortescue Metals (ASX:FMG) has announced it will cut 700 jobs and bring its hydrogen business back into the main company.

According to reports, the company’s job cuts are largely targeted at the hydrogen business, which follows a steep drop-off of interest in the alternative fuel since 2021. The new company will be called Fortescue One.

The move reflects a sharp reverse pivot for Andrew Forrest who has been travelling the world touting green hydrogen projects in recent years. For reference, he spun FFI out of FMG only a few years ago.

The move will surely prompt analysts to ask hard questions. Forrest, through FFI, has made MOU-level deals for green hydrogen in Arizona, Australia, Canada, Brazil, Namibia, Germany, and Egypt. That list is not exhaustive.

A number of private sector entities have also opened the door to FFI and taken an interest including oil and gas services giant Baker Hughes, and even Airbus.

Where exactly those deals will now go is very unclear. A cynic might wonder if hydrogen is starting to feel a bit like carbon capture.

Fortescue shares were down -1.4% in lunchtime trades on Thursday but that’s been compounded by a decline in the iron ore price, too. It’s actually unusual for a share price to drop after announcing job cuts.

Cynical shareholders might even feel relieved that the company is going back to focus on its Fortescue One job, but I’d need to do a user survey to figure that out.

Oh, and don’t forget – buried at the bottom of its Wednesday announcement, Fortescue outlined at least one of its boards is made up of 50% women.

One big problem facing the hydrogen industry that remains hasn’t got much to do with commodity price cycles or regulator enthusiasm or subsidies or shipping costs. It has to do with the boring world of engineering.

Most hydrogen projects, whether blue green or purple, tend towards repurposing old coal and or gas plants. The problem is, pumping hydrogen gas through pipes designed for methane, you eventually get cracks.

FMG shares last traded at $22.04.