In a move that once again isn't exactly shocking, Halliburton Co. has been engaging in much more serious layoffs than they initially planned on back in February.
Back in the early part of the year -- when energy analysts were confidently predicting oil prices would rebound in no time at all -- Halliburton still battened down the hatches, announcing plans for about 6,500 layoffs. Since then the analysts have for the most part gotten increasingly dour with their predictions, oil prices have stayed around $50 a barrel and Halliburton has actually laid off about 10 percent of its workforce in the past two quarters, according to Halliburton president Jeff Miller. That translates to about 9,000 employees actually laid off in the past two quarters.
The oil industry has been limping since oil prices started to slide last June, but oil field services companies have been hit particularly hard because many oil producers -- including the ones that are heavy into the U.S. shale plays that have been a huge part of oil field service business the past few years -- have both cut back on spending and gone back to companies like Halliburton and asked for price cuts on services.
Miller announced the cuts for the Houston-based company on Monday while he was reporting the first-quarter financial results to investors. Halliburton is still moving forward on acquiring rival oil-field-services company Baker Hughes. The company made a $35 billion deal to buy Baker Hughes last November, and it is steadily moving forward. Analysts have been predicting more big oil company mergers in the coming months as the companies seek to cut costs enough to get through low oil prices, according to the release issued by the company.
Halliburton officials are making lemonade out of lemons, but chairman and CEO David Lesar admitted they aren't sure when things are going to turn around or how bad the oil industry situation will get before it gets better:
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
"Industry prospects will continue to be challenged in the coming quarters, and visibility to the ultimate depth and length of this cycle remains uncertain.We will continue to manage through this downturn focusing on reducing input costs,protecting our market position, and delivering the superior execution and solutions our customers have come to expect."
Despite the increased layoff number, Halliburton still doesn't have the distinction of being the oil-field-services company to have laid off the most employees. That dubious honor belongs to Schlumberger Ltd., the largest oil-field services company in the world and another Halliburton rival. Last week Schlumberger announced it would layoff another 11,000 employees, in addition to the 9,000 jobs already cut. That adds up to a total of about 20,000 layoffs, or roughly 15 percent of Schlumberger's workforce, according to the Wall Street Journal.
But these companies do have one little thing in common: In the middle of announcing all these layoffs, both companies reported better-than-expected profits alongside all those job cuts.