HALLIBURTON!
Not good news.
Here’s a question. When prices skyrocketed, we were told it the oil companies profit was not a factor because it’s just an add on to the cost per barrel...that the revenue/profit for oil companies were fairly static. Now with the drop in price, we’re seeing huge layoffs. Is it because these are businesses who ‘support’ the drilling, exploration, processing, etc and with the drop in price there is simply less new exploration and processing? That the reward is so small those functions have been reduced?
HALLIBURTON!
DW: INDUSTRY LAYOFFS CONTRIBUTING TO ANOTHER LOST GENERATION?
http://www.ogfj.com/articles/2015/05/dw-industry-layoffs-contributing-to-another-lost-generation.html
Douglas-Westwood’s May 4 edition of DW Monday comments on how current oil and gas industry layoffs may be leading to another lost generation of workers, reminiscent of the shortage of experienced workers that the industry endured following the oil price downturn of the 1980s.
The oil and gas industry currently suffers a shortage of mid-career professionals primed for leadership and supervisory roles, the legacy of the last oil price downturn in the 1980s to the mid-1990s. At that time, the industry endured significant job losses, and hiring came to a standstill. As a result of the limited talent added, the group of individuals advancing into supervisory or eventual leadership positions in the oil and gas industry is notably small.
Since oil price started declining late last summer, layoffs in today’s industry are nearing 100,000 worldwide. Oilfield service companies Schlumberger, Baker Hughes, and Halliburton announced layoffs of around 20,000, 10,500, and 9,000 employees, respectively, while exploration and production (E&P) companies BP and Chevron each announced layoffs approaching 10,000 of their employees. According to a survey completed in January, 44% of the surveyed companies indicated that they plan to hire fewer workers over the next six months while 5% indicated they plan to completely halt hiring efforts.
Although the oil and gas industry employs numbers of low-skilled workers, the lifeblood of the industry is the variety of specialized engineers, technicians, and rig crews who boast years of involvement in the field, along with formal training or university degrees. Continuing widespread layoffs, frozen or reduced pay checks, and the effects a lengthy downturn will have on the industry can dissuade such individuals from pursuing careers in oil and gas, and encourage college graduates to move into more stable industries.
Just as the legacy of the 1980s–1990s created a shortage of experienced workers – contributing to rising costs, execution challenges, and safety concerns – the numbers of lost personnel, both current and future, threatens the long-term capacity of the industry. To many in the business, DW Monday notes, it feels like history is repeating itself.