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Baker Hughes, Halliburton eye job cuts

OILFIELD services giants Halliburton and Baker Hughes are to lay off thousands of workers as plummeting oil prices force producers to cut back on drilling.

Baker Hughes – which is in the midst of a US$35bn merger with Halliburton – says that it expects to lay off 7,000 employees. This amounts to just over 11% of its overall staff of around 62,000.

"While market demand ended up being more resilient in the fourth quarter than many had predicted, the recent declines seen in rig counts will clearly affect results in 2015,'' says Baker Hughes CEO Martin Craighead. "We are taking proactive steps to manage the business through these challenges."

At the same time, Halliburton executives announced that it is considering a further round of job losses. It already put forward plans to cut roughly 1,000 of its 82,000-strong workforce late last year, and chief operating officer Jeffrey Miller says that its overall plan calls for layoffs “in line with our primary competitors.”

This would seem to hint at several thousand more job losses, as the company’s biggest rivals include Baker Hughes and Schlumberger, which last week cut 9,000 staff, equivalent to around 7% of its workforce.

“Halliburton has successfully weathered multiple industry cycles,” says CEO and chair Dave Lesar. “We are confident that we have the right people, technology, and strategies in place to outperform throughout this cycle too, and emerge as a stronger company.”

Since June 2014 international prices have fallen by almost 60% as over-supply met with sluggish demand. In response, oil companies have heavily reined in their own spending.

Alongside job cuts, producers have been looking to slash costs by reducing exploration and development projects. This has left oilfield services companies particularly squeezed by the downturn as contracts dry up. According to Bloomberg, energy companies are expected to cut their spending by as much as 35% over the next year.

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