Halliburton cuts staff on market weakness

Houston-based company said reduction in workforce not related to Baker Hughes merger.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   Feb. 26, 2016 at 9:14 AM
share with facebook
share with twitter
| License Photo

HOUSTON, Feb. 26 (UPI) -- An 8 percent cut in headcounts at Halliburton is a result of a weak energy sector and not an adjustment ahead of the Baker Hughes merger, a spokeswoman said.

"Due to ongoing market conditions, Halliburton is further reducing its global workforce by approximately eight percent or about 5,000 positions," spokeswoman Emily Mir said in an emailed statement. "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."

The company in January reported a $28 million loss for the fourth quarter, against a profit from the previous year's quarter of $901 million. Total revenue was down 9 percent. Outside of operating costs, the company recorded $79 million in costs related to the pending acquisition of rival services company Baker Hughes, compared to $62 million during the fourth quarter.

Low crude oil prices, down about 40 percent from this time last year, has forced companies to cut back on staff and spending. In some cases, companies are joining forces to improve efficiency during what's expected to be prolonged weakness.

A $7 billion tie-up between Royal Dutch Shell and BG Group was completed earlier this month. For the combined company, costs will move lower by about $4 billion for 2016, but also result in widespread redundancies. About 10,000 staff and direct contractor positions will be eliminated across both companies.

The Halliburton spokeswoman said in response to emailed questions that was not the case with the staffing reductions for the Houston-based company.

"The workforce reductions are unrelated to the pending acquisition of Baker Hughes," she said.

The pending deal is facing obstacles in Europe, where leaders are concerned about competition in an industry controlled by a few select companies. Competition officials in the European Union told UPI the clock was stopped on the review process while it waited for the companies to come forward with requested information.

The European Commission in January found only Halliburton, Baker Hughes and Schlumberger were able to provide necessary services to the industry, adding the merger of the former two would grossly inhibit competition from smaller potential market players.

Related UPI Stories
Trending Stories