Oilfield services company Schlumberger Ltd. (NYSE: SLB) has confirmed to Business First that 10,000 in layoffs announced yesterday after the close of the trading session impacted “all geographic regions,” which includes New Mexico.
According to Blake Herbert, communications coordinator for the firm’s North America operations, the staff reductions were part of 34,000 people that were laid off during 2015 — equivalent to a 26 percent reduction in the company’s global workforce since the end of 2014.
Oilfield services company Schlumberger Ltd has confirmed to Business First that 10,000 in layoffs announced yesterday after the close of the trading session impacted “all geographic regions,” which includes New Mexico.
“Workforce reductions are a part of Schlumberger’s continual effort to match resources with demand worldwide. All geographic regions are impacted by the workforce reduction. However, we are not releasing reduction details for any areas or locations. Our current employee workforce currently stands at 95,000, compared with our peak workforce of 129,000 in November 2014,” she said.
In the company’s 4Q 2015 earnings call Friday, chairman and CEO Paal Kibsgaard said that the layoffs occurred in all parts of the company over the last calendar year and were completed as “required by this downturn.” He also said that he thought the company was “well-positioned to deliver financial results during the first quarter” despite what expects to be a challenging year for the energy sector. Additionally, Kibsgaard said he doesn’t expect an industry recovery to occur until 2017.
Schlumberger reported a $1.02 billion loss during the fourth quarter and year-on-year revenue losses of 39 percent. Year-on-year revenue in North America fell by 55 percent for the same term. In addition, the company has plans for a $10 billion stock buy-back program, which was announced Thursday.
The company, which has long operated in New Mexico and still maintains at least one office in Hobbs, did not disclose the number of people it employs in the state. The company’s acquisition of Houston-based oil well services company Cameron International Corp. (NYSE: CAM), which is expected to close later this spring, could ultimately affect New Mexico as the latter currently has three offices and operations in Farmington.
Schlumberger is the latest to announce workforce reductions as the energy sector continues its downward spiral. Since June 2014, the price per barrel of West Texas Intermediate (WTI) has fallen from about $103 bbl to sub-$30 bbl prices this week. Brent crude prices, too, have fallen to prices not seen for more than a decade. While both WTI and Brent have rallied over the last day or two, many in the industry experts have suggested those prices could fall to $20 bbl or lower.
By: Sal Christ (Albuquerque Business First)
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