OIL SERVICES GIANT SCHLUMBERGER LAYS OFF 10,000 MORE WORKERS
Schlumberger says it lost about $1 billion in fourth quarter
Schlumberger axed another 10,000 jobs and reported a net loss of $1 billion during the final three months of 2015, the world’s largest oil field services company reported Thursday.
It recorded $2 billion in charges for employee severance pay, contract terminations, facility closures and mothballed equipment.
The company kicked off what is expected to represent a gloomy earnings season for service and oil companies in the coming weeks. Halliburton reports on Monday.
Schlumberger reported a $989 million loss for the fourth quarter, down from a $317 million net gain for the same period a year ago. Revenue slid nearly 40 percent for the quarter to $7.74 billion.
For the full 2015 year, Schlumberger had net income of $2.1 billion, more than 60 percent less than the $5.5 billion in 2014. Revenue for the year fell 27 percent from $48.6 billion, to $35.5 billion.
The company, which has headquarters in Houston, Paris and The Hague, declined on Thursday to say how many of its job reductions have been made in Houston area. Since peaking at a global workforce of 130,000 in 2014, Schlumberger has cut more than 25 percent of its employees, or 34,000 jobs. That includes the cuts revealed Thursday.
The energy sector has sliced more than 270,000 jobs globally during the oil crash, according to oil consultant Graves & Co. Oil field services companies account for about half of those.
“In this uncertain environment, we continue to focus on what we can control,” Schlumberger CEO Paal Kibsgaard said in a prepared
statement. “Throughout the year we took a number of actions to streamline and re-size our organization as we continued to navigate the downturn.”
He added: “We believe we will emerge as a stronger company relative to industry peers and competitors once the price of oil and the market conditions in our industry turn around.”
The company is still performing better than its oil field services peers, said Bill Herbert, an analyst at energy investment bank Simmons & Company International.
“It was almost exactly in line with our expectations,” Herbert said of Schlumberger’s earnings. “It’s our top pick in services and one of our top in all of energy.”
Schlumberger cited big well-drilling reductions in North America, where exploration and production companies have cut their capital spending by more than 40 percent, the sharpest reduction since 1986.
Schlumberger is still managing to make some money in North America, and its international margins are flat from 2014 — excluding the charges — Herbert said. The company is reacting strongly with its short-term cutbacks, he said, but still maintaining the long view by keeping its projected 2016 capital expenditures on par with last year.
The U.S. benchmark for oil settled Thursday up $1.18 at $29.53 a barrel for March delivery, while the global benchmark finished at $29.25 per barrel, up $1.37. Last week, the number of U.S. rigs drilling for oil fell to 515, down more than twothirds from its peak of 1,609 in October 2014.
Schlumberger reported its earnings Thursday after the market closed. It plans a conference call to discuss the results Friday.
Kibsgaard said he expected Schlumberger’s acquisition of Houston-based Cameron International to close by the end of March.
Schlumberger plans to consolidate and move much of its Houston headquarters to its existing Sugar Land footprint in a move that analysts have suggested is part of overall cost-cutting efforts.