Halliburton Is Cutting Another 5,000 Jobs
More layoffs are coming to Halliburton. This time the oil field services giant is cutting about 5,000 jobs.
Last month the company admitted that more than 4,000 workers had been cut in the final three months of 2015, and that more layoffs were likely on the horizon since oil prices have continued to stay in the toilet.
On Thursday, the company acknowledged that the next round of reductions will see about 5,000 jobs, 8 percent of the company's global workforce, eliminated, according to Reuters.
Word of this new round of layoffs comes while Halliburton is still in the process of trying to close the $34.6 billion merger with longtime rival Baker Hughes, a deal that would combine the second- and third-largest oil field services companies, respectively.
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The merger would help the resulting large company better function in the industry, since the longtime rivals would be combining forces to help them compete against the rest of the oil field services industry. The problem is, they can't seem to get the blessing of U.S. Justice Department antitrust regulators or to get European Union regulators to sign off on their plan, so the deadline to close keeps getting pushed back, as we reported earlier this week.
But while the merger has yet to come through, Halliburton has still been dealing with the day-to-day issues of oil prices dropping below $30 for the first time in more than a decade. And that has translated into more layoffs.
The company has been cutting jobs for more than a year now in response to the tanking oil market. So far, the company has slashed about 22,000 positions since oil prices first started dropping in 2014, reducing its global headcount by about 25 percent.
"We regret having to make this decision, but unfortunately we are faced with the difficult reality that reductions are necessary to work through this challenging market environment," Halliburton spokeswoman Emily Mir told Bloomberg.
(We've requested comment from Halliburton on the layoffs, but haven't heard back yet. We'll update as soon as we do.)
Of course, Halliburton isn't the only company that has made such drastic headcount reductions. So far the oil industry has cut more than 250,000 jobs globally, with most of the reductions coming from oil field service providers. Companies have been doing this to try to deal with tanking oil prices, which have been down for more than a year because of a glut on the market.
(The oversupply was caused when the Organization of the Petroleum Exporting Countries finally noticed the U.S. shale oil boom and increased production to try to hold onto their share of the market, as we've reported before.)
And it doesn't look like things will be turning around anytime soon. There was a buzz of excitement when OPEC countries and Russia started talking about making a deal to decrease production, but the hopes that such a deal would help the U.S. oil industry were dashed this week. On Wednesday, Saudi Arabia's oil minister, Ali al-Naimi, was onstage at the IHS CERAWeel energy conference here in Houston when he called on high-cost producers (a.k.a. those working in expensive-to-drill U.S. shale plays) to "lower costs, borrow cash or liquidate," according to Bloomberg. Meanwhile, the Saudis made it clear this week that they have no intention of making things easier for U.S. oil producers.
So it appears we've still got a while before the dust settles on this very volatile time in the oil industry. Unfortunately, it's fair to say that this probably won't be the last round of layoffs we see before the industry makes it through the other side of this bust.