BAAR, Switzerland, April 29 (UPI) -- The top executive at oil services company Weatherford International said he was taking a constructive approach to what he said was a "violent downturn."
The company said in its February report on the fourth quarter it lost $1.2 billion in profits. Revenue of $2 billion was down 46 percent.
Noting the "brutality" of the oil sector downturn, Bernard Duroc-Danner, the company's top executive, said early this year that a headcount reduction of as much as 6,000 was possible. In a market where supermajor Chevron posted its first loss in more than a decade, Weatherford's boss said the entire industry was now under pressure.
Lower crude oil prices means less capital to invest in exploration and production, the side of the industry serviced by companies like Weatherford. Peer companies Baker Hughes, Haliburton and Schlumberger have each reported major losses for the first quarter. Schlumberger CEO Paal Kibsgaard said this week his company could revisit costs and resources with caution in mind "given the unpredictable nature of the current market."
In a letter to shareholders, Duroc-Danner said the downturn has been "very painful," but offered constructive opportunities for retooling.
"We are in the process of permanently reforming our operating cost structure, and our organizational operations have been structurally streamlined within geographic segments," he said.
Last year, the company closed six service facilities and 90 operating facilities in North America while at the same time completing its target of cutting payrolls by 14,000. Capital spending for 2016 is expected at $300 million, 56 percent lower than last year.
"Over the last few years, there has been a 'quantum change' within Weatherford," Duroc-Danner said. "Based on our fundamental progress and our disciplined approach towards guiding our company through this violent downturn, we are ready to address any market conditions, both managing decrementals in the event of extended market declines as well as to exploit incremental gains when recovery comes."