Halliburton Co. has confirmed it is closing a facility in El Reno, OK, and laying off close to 800 people as it consolidates its Midcontinent operations on slowing activity.
A unit of the Houston oilfield services giant, Halliburton Energy Services Inc. (HESI), sent a letter on Monday to the Oklahoma Office of Workforce Development indicating it planned “mass layoffs” at the El Reno facility.
The layoff “is expected to be a permanent employment loss. At this time it is expected that the facility will not remain open. It is reasonably anticipated that approximately 800 employees will be affected by the layoff.”
A Halliburton spokesperson confirmed the layoffs on Tuesday.
“Halliburton confirms it is relocating the majority of its operations in El Reno to its Duncan field camp in December. We made this decision in response to reduced activity levels in Oklahoma and the greater Midcontinent area.
“Consolidating our operations takes advantage of Halliburton’s extensive footprint and synergies in the Duncan area including a strong employee hub and manufacturing expertise.”
Many of the El Reno employees previously worked in the Duncan field camps.
The El Reno field camp has been a dispatch command center where Halliburton has housed several hydraulic fracturing crews. Of the 800 employees at the camp, around one-third were working with acids used in the fracturing process and close to 80 people handled cementing work.
“Making this decision was not easy, nor taken lightly, but unfortunately, it was necessary as we work to align our operations to reduced customer activity,” the spokesperson said.
Some of the employees were to be relocated to the Duncan, OK, field office. However, no specific numbers were issued as Halliburton is working with employees to determine if relocation is an option.
"Many of the El Reno employees have previously worked at the Duncan field camp locations and will be moving back," Halliburton noted.
The Houston oilfield services giant, the No. 2 operator in the world, employs more than 60,000 people in 40 countries. It reduced its North American workforce by around 8% in 2Q2019 and cut close to 650 positions in four western states during October.
The job losses are not unexpected, as CEO Jeff Miller said during the 3Q2019 conference call that the company was stacking equipment in North America.
Miller told analysts in October that the domestic fracturing business was forecast to decline further in the final three months of 2019, with margins down by 125-175 basis points and revenue plummeting by low double digits.
“Feedback from our customers lead us to believe that the rig count and completions activity may be lower than the fourth quarter of last year,” Miller said.
North American revenue accounts for more than half of Halliburton’s global total, and it was off in 3Q2019 by 21% year/year and 11% sequentially. Completion and production activity in North America slumped by 16% from a year ago, and more land equipment was idled.