Oil services company Schlumberger is to make another round of redundancies to add to the 20,000 jobs it has already cut this year.
Patrick Schorn, Schlumberger’s president of operations, did not disclose where, when and how the redundancies will be made when he addressed a conference held in New York yesterday.
The layoffs will incur a pretax restructuring charge of about $350m in the fourth quarter, Schorn said.
“The latest leg down in activity has led us to again evaluate our staffing levels against expected activity. Following which, we will further right-size the organization based on the activity outlook for 2016,” he told the Cowen & Company Ultimate Energy conference.
He said Schlumberger’s main challenge has been to manage its cost and resource base while exploration and production activity has plummeted along with demand for the company’s services.
“By reacting quickly, we have also been able to complete the headcount reductions that we took a charge for in the first quarter of the year, thereby avoiding additional restructuring charges in the second and third quarters. This helped stabilize our organization and maintained focus on serving our customers,” Schorn said.
He remained hopeful of a turnaround in fortunes for upstream oil and gas production, especially in the USA: “In spite of a very different crude oil supply mix, with the world’s largest consumer [the USA] now capable of meeting its needs to a much greater extent than at any time in the past 30 years, we believe that two consecutive years of reducing investment will lay the foundations for a faster recovery than some observers are suggesting.”
This year, Schlumberger’s biggest rivals Baker Hughes and Halliburton have so far cut 16,000 and 18,000 jobs respectively.