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Wednesday, April 22, 2015

Baker Hughes and Halliburton Announce That They've Laid Off More People Than Previously Expected

First, from the Washington Post:
Halliburton Co. has cut 9,000 jobs — more than 10 percent of its workforce — in about six months and is considering more cost-cutting moves as falling oil prices sap demand for its drilling help. 
Halliburton executives disclosed the job cuts Monday on a conference call with investors. The Houston oilfield-services company reported a loss of $643 million in the first quarter. 
Oil prices plunged starting last summer, leading to a decline in drilling activity. Spot prices for crude have risen slightly since early January but remain about half their level of last July. 
That has led to belt-tightening across the industry as oil companies move to curb production, with oil-field services and drilling companies especially hard hit. 
Haliburton’s oilfield rival Schlumberger Ltd. said last week that it would cut 11,000 jobs on top of 9,000 planned job cuts that it announced in January.
Halliburton previously announced that it would cut 6,400 jobs.

Then there was this announcement included in the first quarter 2015 results from Baker Hughes:
"During the first quarter we took necessary actions to reduce our cost base and resize our footprint to mitigate current market conditions. These actions include the closure and consolidation of approximately 140 facilities worldwide along with the idling or impairment of excess assets and inventory. Correspondingly, we made the decision to increase our headcount reductions to a total of approximately 10,500 positions, or 17% of our workforce, which is 3,500 positions higher than what we previously announced. Combined, these actions are projected to reduce cost by more than $700 million on an annualized basis. 
"Looking out to the second quarter, we expect unfavorable market conditions to persist. North America and international rig counts are projected to continue declining across most onshore and shallow water markets, which would further intensify the oversupply of oilfield services. We will continue monitoring market conditions closely and will take actions as necessary to optimize efficiency, while retaining the capacity to flex up when market conditions improve. 
"Regarding the planned combination with Halliburton, I am pleased with the progress to date including a positive stockholder vote received in the first quarter. Notwithstanding the current market volatility and the pending merger, our management team and employees are working diligently to ensure we achieve our near term objectives, while maintaining focus on our strategic priorities. To that end, we remain committed to developing and deploying innovative technologies that enable our customers to lower the cost of well construction, optimize well production, and increase ultimate recovery."
There sure are a whole lot of people suffering the effects of the recent downturn in energy prices.

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