WEATHERFORD 10,000 LAYOFFS

Weatherford International raised its layoff target to 10,000 positions on Thursday after booking an over 50 percent income drop in the first quarter.

The UK-based services provider reported $2.79 billion in first quarter revenue, down 25 percent from last quarter, while operating income slid 57 percent from the fourth quarter to $238 million.

The firm also took $85 million in after-tax charges for the first quarter primarily tied to severance costs and the devaluation of the Venezuelan Bolivar.

Weatherford also raised its headcount reduction target to 10,000 positions, up from the 8,000 positions previously announced, with the bulk of the cuts coming from North America.

The company said that by the end of the first quarter it had completed 6,449 terminations that resulted in expected yearly savings of over $442 million.

"We expect to complete the entire revised program of 10,000 terminations by the end of the second quarter generating expected annualized savings of $640 million," Weatherford said.

The company is also planning to shut down and consolidate 60 operating facilities across North America by the end of the year in addition to the planned shutdown of seven manufacturing facilities.

North American revenues fell to $1.16 billion in the first quarter, a 34 percent sequential drop, and the company took a $10 million operating loss for the region due to "the significant decline in the North American land rig count and pricing pressures."

The company also booked losses across most of its international operations and saw international revenue fall 17 percent from last quarter to $1.44 billion.

Revenues tied to Latin America shrank to $486 million, a 27 percent fall from the fourth quarter, while operating income in the region slid to $98 million.

First quarter revenues from operations in Europe, Sub-Sahara Africa and Russia fell 16 percent sequentially to $417 million while operating income in the region slipped to $71 million, a 25 percent decline from last quarter.

The company's operations in the Middle East, North Africa and Asia Pacific regions faired a bit better with revenues falling only 7 percent from last quarter to $533 million while operating income jumped 15 percent from the fourth quarter to $69 million.

"Our international performance will be resilient. Both Eastern Hemisphere and Latin America will show relative strengths through the 2015 market decline, and will outperform on margin growth. North America will remain very challenged," Weatherford chief Bernard Duroc-Danner said.

petroglobalnews.com