Oil-Field Services Giant To Cut Jobs, Spending -- WSJ
25 Julho 2020 - 4:02AM
Dow Jones News
By Collin Eaton
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (July 25, 2020).
Schlumberger Ltd., the world's largest oil-field services
company, is cutting about 21,000 jobs as oil producers slash
spending in response to a historic drop in prices amid the
coronavirus pandemic.
Schlumberger said Friday that it recorded $3.7 billion in
impairment charges in the second quarter, including about $1
billion related to the job cuts, which represent roughly one-fifth
of its workforce.
"This has probably been the most challenging quarter in past
decades," Chief Executive Olivier Le Peuch said, noting revenue
fell sharply because of an unprecedented fall in oil-field activity
in North America.
Schlumberger's sweeping workforce reduction is the latest
example of how companies are having to sharply tighten their belts
and cut staff as demand for their products and services plummets
due to the pandemic.
From United Airlines Holdings Inc. and Boeing Co. to General
Electric Co. and Uber Technologies Inc., dozens of major companies
have announced they are laying off workers as they buckle down in
anticipation of a prolonged slowdown.
Many companies have chosen to furlough rather than completely
sever ties with workers in hopes of bringing them back when
conditions improve. But as the effects of the pandemic drag on,
more employers may resort to letting workers go.
Energy companies have been particularly hard-hit. U.S. oil
prices dropped into negative territory for the first time in April
as demand for gasoline and jet fuel fell dramatically this spring
after people stopped traveling and governments imposed stay-at-home
restrictions.
The oil price crash prompted U.S. oil companies to sharply cut
capital spending on drilling and fracking new wells, the lifeblood
of oil-field service companies such as Schlumberger and rivals
Halliburton Co. and Baker Hughes Co.
Earlier this week, Halliburton and Baker Hughes both reported
losses and declining revenue for the second quarter, with
Halliburton estimating spending by North American oil-field
services customers will decline 50% this year compared with
2019.
Schlumberger's Mr. Le Peuch said the company has accelerated a
plan to restructure its North American business, shutting down
scores of facilities in a move to position itself "for a market of
smaller scale and lower growth outlook, but with higher
returns."
He said oil demand is slowly returning to normal and is expected
to improve as governments lift restrictions in support of increased
consumption, paving the way for a modest pickup in fracking
activity in North America.
"We expect the global decline to recede into a soft landing in
the coming months absent further negative impact from Covid-19 on
the economic recovery," Mr. Le Peuch said in a conference call
Friday.
As many as 55,000 of the company's employees are working
remotely, he said. Schlumberger has corporate offices in Paris,
Houston, London and The Hague.
For the second quarter, Schlumberger reported a net loss of $3.4
billion, or $2.47 a share, compared with a profit of $492 million,
or 35 cents a share, in the same period last year. Revenue declined
35% to $5.4 billion, with North American sales dropping 58% to
about $1.2 billion.
Earnings per share, excluding charges and credits, came to 5
cents. Analysts polled by FactSet were expecting a loss of a penny
a share.
Schlumberger said it employed approximately 85,000 people as of
the end of the second quarter. It had said in the first quarter it
employed about 103,000.
Halliburton has also cut thousands of jobs, reporting Monday
that it had more than 40,000 employees as of the end of the second
quarter, down from about 55,000 at the end of the fourth quarter.
It didn't provide specific job-cut numbers.
"This was a difficult decision, but is a necessary action as we
work to successfully adapt to challenging market conditions,"
Halliburton spokeswoman Emily Mir said.
Last month, British oil giant BP PLC said it plans to cut nearly
10,000 jobs, or 14% of its workforce. U.S. oil major Chevron Corp.
has said it expects to reduce its global workforce of about 45,000
by 10% to 15%, with most of the reduction taking place this
year.
Write to Collin Eaton at collin.eaton@wsj.com
(END) Dow Jones Newswires
July 25, 2020 02:47 ET (06:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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