Halliburton to cut 9,000 jobs – Schlumberger soon to follow

Two oil workers
Source: DollarPhotoClub

The U.S. second-largest oilfield services provider Halliburton has announced that it has cut 9,000 jobs in the fourth quarter of 2014 and the first quarter of this year. The cuts, representing 10 per cent of the company’s workforce, were caused by the low oil price environment that has caused a net loss for the company of $643 million in the first-quarter.

As the rig count in the American shale plays falls, and companies are putting on hold drilled but uncompleted wells, the oilfield companies are increasingly feeling the squeeze. In a low-price environment the balance of power shifts to the E&P companies who are putting the pressure on the likes of Halliburton, and its main rival Schlumberger, to cut prices.

Schlumberger, No.1 in oilfield services, which posted net loss of $643 million in the first-quarter, cut 9,000 jobs in January and has already announced that it would cut up to additional 11,000 workers.

In a written statement, Halliburton’s CEO Dave Lesar warned that the industry will continue to face challenges in coming quarters and said it’s unclear how long the downturn will last, although Halliburton president Jeff Miller said that it normally lasts three quarters for a rig count to move from peak to trough.

“We expect to continue to see pricing pressure for our services until the rig count stabilizes,” Dave Lesar said.

Halliburton said Monday that it lost $643 million, or 76 cents per share, in the first quarter compared with net income of $622 million a year earlier. Still, the results excluding $823 million in severance, write-downs and other one-time costs amounted to an adjusted profit of 49 cents per share, beating the forecast of 41 cents among 19 analysts surveyed by Zacks Investment Research. Revenue fell 4 percent to $7.05 billion, higher than analysts’ estimate of $7.03 billion.

Halliburton shares rose 96 cents, or 2 percent, to close at $47.85. They have gained 22 percent in 2015 but are down 36 percent from their 12-month peak last July.

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