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Schlumberger to cut 9,000 jobs as oil prices plunge

January 16, 2015
(Reuters) – The oil services group Schlumberger is to cut 9,000 jobs, or about 7% of its workforce, as it focuses on controlling costs amid plummeting oil prices.
The company said it took charges amounting to $1.77bn in the fourth quarter, including impairment charges related to its seismic business, Venezuela currency devaluation and job cuts.
Schlumberger had said last month that it would take a $1bn charge related to jobs cuts and the writedown of some seismic vessels.
Philip Van Deusen, an analyst with Tigress Financial Partners, said: “They did say they would be cutting jobs, but the magnitude of them is definitely a shocker.” A number of global oil companies such as BP and ConocoPhillips have cut jobs after a fall of nearly 60% in oil prices over the past six months. Brent crude closed at $47.67 on Thursday.
Robin Shoemaker, analyst with KeyBanc Capital Markets, said: “If oil prices stay at this level, none of these companies would just be able to adjust with one round of workforce reductions.” Schlumberger’s customers – oil producers – have cut capital budgets for 2015 and reduced the number of rigs.
The Houston-based company said capital expenditure, excluding multi-client and project management investments, is expected to be $3bn for 2015, compared with $4bn the previous year. “In this uncertain environment, we continue to focus on what we can control,” chief executive Paal Kibsgaard said.
Schlumberger, which provides drilling technology and equipment, reported a fourth-quarter profit that beat Wall Street estimates for the 10th straight quarter. Revenue rose 6% to $12.64bn, mainly helped by an 18.5% jump in revenue from North America.
Net income attributable to the company fell to $302m, or 23 cents a share, in the fourth quarter ended 31 December, from $1.66bn, or $1.26 a share, a year earlier.
On an adjusted basis, the company earned $1.50 a share, beating the average analyst estimate of $1.45, according Thomson Reuters I/B/E/S.
Shares in the company closed at $76.63 on the New York Stock Exchange on Thursday.
Source: The Guardian

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