Everyone needs to help!
Please contribute today!
Posted on 04/16/2015 3:26:42 PM PDT by afraidfortherepublic
HOUSTON – Oil field services firm Schlumberger announced Thursday it plans to ax another 11,000 workers, kicking off what could be a second major wave of layoffs across the oil industry.
The move will bring Schlumberger’s layoffs up to 20,000 employees, roughly 15 percent of its workforce, since it began paring back its payroll earlier this year to cope with low oil prices. The nine-month oil slump has cost the energy industry more than 120,000 jobs so far, according to oil field staffing firm Swift Worldwide Resources.
Oil equipment companies have been forced to fine-tune their workforce as they promise oil companies up to 20 percent in price reductions for rental tools, equipment and other services, said James Wicklund, an analyst at Credit Suisse.
Wicklund said it’s likely another wave of layoffs will sweep through the service industry after this year’s first in recent months, when major players announced more than 40,000 workers would be tossed from the oil-tool suppliers. It’s even possible a third wave will take place in the third quarter, albeit smaller than the first two.
Schlumberger’s workforce peaked in the third quarter of 2014 with 126,000 employees. Spokesman Joao Felix said the reductions are in progress and should be completed in the second quarter.
Schlumberger, based in Houston, Paris and the Hague, said it took a $390 million charge in the first quarter related to the job cuts and a company leave-of-absence program. It blamed the “severe fall” in North American oil field activity as U.S. producers parked hundreds of drilling rigs and cut billions of dollars in spending.
The firm, which is the world’s biggest oil field services provider, said its first-quarter revenues fell to $10.2 billion, down 9 percent from the same January-March period last year. The figure was off by 19 percent compared to the fourth quarter of 2014, a sign that the oil crunch hit sales harder in the new year.
Schlumberger’s North American revenue fell further than its international sales, declining 13 percent compared to the 8 percent revenue drop it saw overseas.
In a written statement, CEO Paal Kibsgaard said three quarters of the 19-percent sequential drop in revenue came from lower activity and pricing concessions, but the firm was able to mitigate some of the blow to its profit margins by managing costs and accelerating a “transformation” program designed to make product lines and regional units more efficient.
“Schlumberger was already going through a transformational process, identifying ways to be more efficient,” Wicklund said. In first-quarter conference calls, “the thing we will hear most about is efficiency. Efficiency and returns.”
Schlumberger banked a profit of $975 million, or 76 cents a share, in the first three months of the year, compared with $1.59 billion, or $1.21 a share, in the same period last year. That fell below analysts’ expectations of 91 cents a share.
Stewart Glickman, an analyst at S&P Capital, said after a series of cost-efficiency efforts in the service industry in recent years, it’s hard to see where the company and its rivals can cut without slicing into muscle.
“It makes me wonder how much more fat is there to cut beyond what they already did,” he said. “I don’t know there’s a lot of easy pickings in terms of supply chain improvements. If you really need to lower your cost base, you need to roll the dice and use fewer people and hope you’ll get good people again.”
lol
what’s Obama going to do now that the fraking revolution isn’t going to mask the mess he has made of the economy anymore?
The good news is... as this spirals out of control and what’s left of the economy with it, the people wont be in the mood for another Democratic president.
This is our chance to get a true believer in the White House and undo all the damage this traitor has done.
This trend is hurting me directly since our company sells sensors used in offshore oil exploration. No drilling, no need for further exploration. Our little company is severely affected. We were producing 500 sensors per month until last Dec. We’ve only produced 500 in all of 2015 with no orders on the books. Ouch!
This drop in prices hurts most any company that sells their product and services for new oil production equipment and services.
Naturally. Our customer (who pays us to make the sensors) is hurting even worse.
I bet a big chunk of that hurt comes from trying to avoid layoffs.
The nine-month oil slump has cost the energy industry more than 120,000 jobs so far ...
And obamie’s answer? To let in millions more to take the few jobs from US citizens.
We could solve that problem by driving oil prices back up to $110 a barrel.
Why else would Ø want Iran to have nukes?
We will now see just how much the energy sector was propping up employment and the economy.
Have that 500 sold, or are they in inventory? In any event, it sounds like some very hard decisions are going to need to be made to salvage anything.
Sold. And paid for. We only produce to order, and I’m really going to miss those checks.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.