Baker Hughes Cuts 10,500 from Payroll Worldwide

Barely few weeks after Schlumberger said it would cut another 11,000 jobs from its workforce to bring the total of disengaged workers to 20,000 or15 per cent of the company’s staff, Baker Hughes has also joined the list of oil services companies that are whimpering in the current weak global oil market by announcing worldwide layoffs.

The oil services company said it was cutting about 17 per cent of its workforce, or around 10,500 jobs, as it works to streamline its finances amid the drop in exploration and production activities.

Baker Hughes, which reported revenue of $4.59 billion in the first quarter of 2015, representing a 20 per cent decline year-on-year, noted that “extreme market forces” are in play in the global energy sector.

“Our first quarter results are a reflection of the extreme market forces faced by our industry since late December,” Baker Hughes Chairman and Chief Executive Officer, Martin Craighead said in a statement.

“Consistent with past downturns, many of our customers have curtailed or canceled projects,” he added.

Earlier in its latest report, the company said the number of rigs in service worldwide fell by about 1.8 percent from March to 1,251 for the week ending April 10. In the United States, the rig count is down nearly 4 per cent to 988, while Craighead said the North American rig count was down by more than 1,000.

Baker Hughes emerged as a takeover target by rival oil field services company Halliburton in November 2014.

“We expect unfavourable market conditions to persist,” Craighead said.

“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,” he said.

Halliburton under the terms of the ongoing acquisition of Baker Hughes will buy all outstanding shares in Baker Hughes for $34.6 billion in a deal that is expected to close by the end of the year.

Following the decrease in Schlumberger’s quarterly revenue for the first quarter 2015, the company said it would cut another 11,000 from its workforce.

Schlumberger said most of the decrease in the quarterly revenue for the first quarter of the year came from the “severe” decline in North America.

Chairman and Chief Executive Officer of the company, Pall Kibsgaard said in a statement that Schlumberger first-quarter revenue decreased 19 per cent sequentially driven by the severe decline in North American land activity and associated pricing pressure.

Schlumberger said currency fluctuations in oil-rich and sanction-strapped Russia, as well as for OPEC-member Venezuela, led to reductions in international operations.

Most of the quarterly loss, however, was attributed to lower activity in the exploration and production side of the energy sector.

Kibsgaard said that, while global economic signs point to a steady increase in oil demand, reductions in spending on exploration and production should mean the market remains tight.