HALLIBURTON: TO LAY OFF 1000

Halliburton Co. , the world's second-largest oilfield-services company, said Thursday it will lay off 1,000 employees outside the U.S.

The Houston company is cutting its workforce in offices across Europe, Russia, the Middle East and Africa in the face of a nearly 45% drop in oil prices that has pushed a barrel of crude to its cheapest level in five years.

The job cuts, which are effective immediately, come less than a week after the largest oilfield services company, Schlumberger Ltd. , announced it would reduce its headcount. Halliburton employs 80,000 people in 80 countries, so the job cuts amount to 1% of its global workforce.

Last month, Halliburton announced plans to buy oil-field rival Baker Hughes Inc., in a deal valued at $35 billion. When those plans were made public Halliburton said that layoffs weren't coming and that the merged companies would add thousands of new jobs in the coming year.

That deal is still pending and must be approved by antitrust regulators.

Oil prices have been falling since late June, but in the three weeks since the Halliburton-Baker Hughes merger was announced price drops have accelerated. The U.S. benchmark oil price settled Thursday at $59.95 a barrel, a level not seen since 2009. Brent crude, considered the global oil benchmark price, settled Thursday at $63.68, down from a 2014 high of more than $115 a barrel.

"The decision to eliminate jobs is never easy. Our talented workforce is the foundation of everything we accomplish, and we place the highest value on the commitment and hard work that our employees dedicate to building our company," Halliburton said in a statement. "Yet, we believe these job eliminations are necessary in order to work through this market environment."

Oil-field service companies help energy producers explore for oil and gas. Halliburton and others are hired by big multinational oil companies, Texas wildcatters and government-controlled energy concerns overseas to drill and frack wells. These service firms sell and rent specialized equipment, operate drilling rigs and supply workers for oil-field sites, often offering it all in packages charged at a daily rate.

For several years as oil prices increased the amount that oil-field service companies could charge for their expertise climbed. But falling crude-oil prices are forcing oil companies to scale back drilling plans and ask for services at deep discounts.

Halliburton's chief financial officer, Mark McCollum, told investors Wednesday that the company would make some job cuts but he didn't say how many. "We're already pulling in," he said, adding that he expected a $75 million restructuring charge during the fourth quarter "as we trim out some headcount and activities."

Explaining the need for such measures, Mr. McCollum pointed to the depressed oil market, which is known for booms and busts. "It's not our first rodeo," he said. "We know how to do this."

wsj.com