Oil-field service company Weatherford International PLC said Wednesday it plans to layoff more workers as a sharp downturn in energy prices drove revenue down in the first quarter, pushing it into the red on an adjusted basis.
Weatherford, one of the largest oil-field service companies in the world, said it plans to cut 18% of its staff by the end of the second quarter, with the bulk of the cuts coming in its North American operations. The cuts, which the company projects will save it about $640 million a year, would leave it with about 39,000 workers in its core business and 6,000 rig workers.
As of March 31, it had 49,000 workers, down from 56,000 at the start of the year, the company said.
Weatherford had disclosed plans to cut about 15% of its workforce in February and said it intended to shut down seven manufacturing facilities and consolidate 60 more across North America as it shifts its business to Brazil and Argentina in response to fallen energy prices. Two facilities were closed in the first quarter with four expected to be closed in the second quarter and one in the third quarter, Weatherford said.
Companies such as Weatherford help energy producers drill oil and gas wells, but falling prices have jeopardized the industry’s plans this year.
Schlumberger Ltd., which late last year had laid off 9,000 workers, said this month it plans to cut 11,000 more following a 39% drop in first-quarter profit.
Meanwhile, Halliburton Co., which is buying rival Baker Hughes Inc., has cut 9,000 jobs, or 10% of its workers, over the past two months and plans to cut further. It didn’t specify how many jobs it planned to cut.
Overall, Weatherford reported a loss of $118 million, or 15 cents a share, compared with a year-earlier loss of $41 million, or five cents a share, for the year-ago period. Excluding restructuring-related costs other items, the company swung to a loss of four cents from a 13-cent profit a year earlier.
Net revenue fell 22%, to $2.79 billion.
Analysts surveyed by Thomson Reuters were expecting a penny a share on $3 billion in revenue.
In the latest period, North American operations, which accounts for the bulk of the company’s revenue, fell 28%. International operations were down 13% and revenue from land drilling rigs dropped 43%.
Shares fell nearly 3% to $13.03 in recent after-hours trading.
By Maria Armental