Halliburton Co, the world’s second-biggest oil services company, said on Thursday it is slashing 1,000 jobs in its eastern hemisphere offices amid tumbling global oil prices.
The layoffs, which are effective immediately, represent 1.25 percent of Halliburton’s 80,0000-strong workforce. They are to take place in Europe, Asia, Africa, the Middle East and Australia, but jobs in the Americas will not be affected.
The company said the decision was not an easy one, but necessary amid tumbling oil prices.
“The decision to eliminate jobs is never easy. Our talented workforce is the foundation of everything we accomplish,” spokesman Chevalier Mayes told reporters. “Yet, we believe these job eliminations are necessary in order to work through this market environment.”
Oil prices sank further in Asia yesterday, with analysts warning of little respite from the selling after plunging more than 40 percent since June.
US benchmark West Texas Intermediate (WTI) for January delivery was down US$0.66 at US$59.29 in afternoon trade. The contract on Thursday closed below the psychological US$60 mark in New York for the first time since July 2009. Brent crude was down US$0.29 at US$63.39.
WTI and Brent prices have fallen precipitously since hitting this year’s peaks of US$106 and US$115 respectively in June.
The drop has been attributed to slowing growth in China and emerging-market economies, a recession in Japan and a near-stall in the eurozone.
On top of that, OPEC last month said it would maintain output levels despite ample global supplies, in part due to cheaper oil extracted from North American shale rock.
At a conference on Wednesday, Halliburton chief financial officer Mark McCollum said the company expected a restructuring charge in its fourth quarter in relation to the job cuts.
“We are right now anticipating a restructuring charge in the quarter, probably to the tune of about US$75 million, as we trim out some headcount and activities around the world,” McCollum told investors.
Oil prices have dropped 44 percent since June, forcing companies to scale back exploration activities, which has reverberated with contractors such as Halliburton.
The oil services company is in the midst of finalizing the acquisition of Baker Hughes, which agreed to be bought by Halliburton last month in a US$34.6 billion deal.
Halliburton said news of the layoffs was not related to the acquisition.
“No layoffs have occurred or are presently planned as a result of the pending Baker Hughes acquisition,” Mayes said.
Analysts say the deal could pave the way for more takeovers in the industry as falling oil prices put pressure on exploration companies to cut spending.
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