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Energy Industry Job Cuts Continue; Schlumberger Shed 16K in 1H2016

The energy industry has lost tens of thousands of jobs since oil prices collapsed in 2014, and while the workforce reductions may have slowed, several companies have reported more layoffs in cost-cutting efforts during recent days.

"As a result of the weakness in activity that will persist through 2016 as expected, we have made another significant adjustment to our cost and resource base, including the release of more than 16,000 employees during the first half of 2016 and a further streamlining of our overhead, infrastructure, and asset base," Schlumberger Ltd. CEO Paal Kibsgaard said. "This has led to $646 million in restructuring charges in the second quarter for the reduction in our workforce..."

About half of those cuts reportedly came in the second quarter.

The restructuring "should bring the company into the shape where we are well-positioned to navigate the bottom of the market and also well-positioned to start growing again going forward," Kibsgaard said during a conference call with analysts Friday.

Schlumberger, the No. 1 oilfield services (OFS) provider, in January said it trimmed its global workforce by another 10,000 in the final months of 2015 (see Shale DailyJan. 22). Kibsgaard said in January that he was "optimistic" no more jobs would be be lost.

Halliburton Co., the No. 2 OFS, and No. 1 hydraulic fracturing operator in North America, announced in February that it was sending 5,000 people home, slashing its workforce by 8% (see Shale DailyFeb. 25). A month later, Halliburton confirmed that base salaries and bonuses for senior management had been reduced, while annual pay increases for the entire workforce were been suspended to contend with market declines (see Shale DailyMarch 10).

Contacted by NGI on Friday, a Halliburton spokesperson said the company further reduced its headcount by almost 9% globally during 2Q2016.  

ConocoPhillips has plans to reduce its workforce by about 1,000, one in a series of cost-reduction measures the Houston-based company has taken over the last 18 months in response to the downturn in commodity prices.

"We have taken several steps as a company  to adapt to lower and more volatile prices and strengthen our position coming out of the downturn," ConocoPhillips spokesman Daren Beaudo told NGI's Shale Daily. "Over the past couple years, we’ve significantly reduced our capital activities and finished some major projects, which left us with more organizational capacity than we need.

"We have been transparent with employees that we will have targeted workforce reductions in certain areas of our business to align our organizational capacity with future activity levels. We expect approximately 6% of our global workforce to be impacted, with the largest impact occurring in North America. We’ll know more in the next several weeks as we work through our formal process.

A spokesperson for Houston-based FMC Technologies Inc. told NGI's Shale Daily on Friday that the company's headcount was 15,500 in 2Q2016, down about 1,000 from 1Q2016. FMC, a technology innovator in the subsea and on land, recently agreed to merge with Paris-based Technip, an energy engineering and construction giant, in a transaction valued at $13 billion (see Shale DailyMay 19).

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