SCHLUMBERGER CUTS 2,000 JOBS
Schlumberger Ltd. on Thursday said it laid off another 2,000 employees during the first quarter as it reported that earnings for the period dropped 49% on significantly lower sales.
Since November 2014, when the oil bust started to take hold of the energy industry, Schlumberger has cut 36,000 jobs, or 28% of its workforce.
The first three months of the year were some of the worst yet in this downturn, as oil company customers continued to slash their spending and drilling and other well work ground to a halt, the company said.
Schlumberger, the largest oil-field services outfit in the world, booked a profit of just $501 million amid tumbling revenue as energy producers dialed back their orders for the company's services drilling and fracking wells.
"The decline in global activity and the rate of activity disruption reached unprecedented levels as the industry displayed clear signs of operating in a full-scale cash crisis," said Paal Kibsgaard, chief executive.
Even though oil markets will continue to come into balance this year, a drilling recovery in North America could remain elusive, Mr. Kibsgaard said. He said previously that he expects oil companies to be cautious about restarting their spending and for a recovery in drilling activity to lag behind any uptick in crude prices.
"This environment is expected to continue deteriorating over the coming quarter given the magnitude and erratic nature of the disruptions in activity," he said.
Companies that sell oil-field services are considered a bellwether for the health of the oil and natural gas sector, and Schlumberger is the first big firm of the sort to report first-quarter results. Halliburton Co. and Baker Hughes Inc., competitors that have a pending merger deal, are set to report Monday and Wednesday, respectively.
A day after the latest quarter closed, Schlumberger completed its acquisition of Cameron International Corp., which makes oil-field equipment for drilling wells and servicing pipelines.
Revenue in Schlumberger's North American business slumped 55% in the quarter, with the segment reporting a pretax operating loss of $10 million, down from a profit of $416 million in the prior year period.
Outside North America, Schlumberger's revenue dropped 28% and pretax operating earnings slumped to $1.06 billion, down from $1.66 billion.
Over all, Schlumberger reported a profit of $501 million, or 40 cents a share, down from $975 million, or 76 cents a share, a year earlier. Revenue decreased 36% to $6.52 billion.
Analysts polled by Thomson Reuters expected per-share profit of 39 cents and revenue of $6.51 billion.
Mr. Kibsgaard said Schlumberger would continue to "tailor costs and resources to activity, while remaining cautious in adding back capacity given the unpredictable nature of the current market."
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