* Down 1,250 staff as shallow-water rigs struggle for work

* Transocean took $1 bln writedown on jackup fleet value

Transocean Ltd (RIGN.VX), the world's largest offshore rig contractor, shrunk its work force by 6 percent last year as increased competition for shallow-water rigs led to more older rigs being set aside.

In an annual filing with regulators on Monday, Transocean said it had 18,050 employees at the end of 2010, down 1,250 from a year before. The number of those classified as contract labor had fallen by about 250 to 1,950, the company added.

As for rivals, Noble Corp (NE.N) added 200 to its headcount in 2010, bringing it to 5,900, while Diamond Offshore Drilling Inc (DO.N) shed 200 jobs, reducing its overall staff to 5,300.

Extended idle time for Transocean's 54 standard shallow-water jackup rigs forced the Switzerland-based company to write down their value by $1 billion in its latest results. [ID:nN23175440]

Transocean has now pulled 25 of those jackups off the market, for an increase of five stacked standard jackups in the past year. With a surplus of jackup rigs generally, clients have increasingly opted for higher-specification rigs instead.

While the well blowout last April that destroyed a Transocean rig led to a long period of limited activity in the Gulf of Mexico, the workers on Transocean's deepwater rigs there are kept on in anticipation of a resumption of drilling. (Reporting by Braden Reddall, editing by Gerald E. McCormick)