Halliburton Co has cut 9,000 jobs — more than 10 percent of its workforce — in about six months and is considering more cost-cutting moves as falling oil prices sap demand for its drilling help.
Halliburton executives disclosed the job cuts on Monday on a conference call with investors. The Houston, Texas-based oilfield-services company reported a loss of US$643 million in the first quarter.
Oil prices plunged starting last summer, leading to a decline in drilling activity. Spot prices for crude have risen slightly since early January, but remain about half their level in July last year.
Photo: Reuters
That has led to belt-tightening across the industry as oil companies move to curb production, with oil-field services and drilling companies especially hard hit. Haliburton’s oilfield rival, Schlumberger Ltd, said last week that it would cut 11,000 jobs on top of 9,000 planned job cuts that it announced in January.
Schlumberger and Halliburton help map underground oil and gas reservoirs and drill wells for energy companies. Halliburton is a leader in hydraulic fracturing, or the process of breaking underground rock formations to allow oil and gas to escape.
Halliburton president Jeff Miller said he was not ready to say the worst has passed, but that such slumps usually last about three quarters.
“Once we see activity stabilize, the healing process can begin, but it takes time,” he told analysts.
US drilling activity has dropped by half since November, and energy companies are pressing Halliburton to reduce fees. About two-thirds of Halliburton’s revenue comes from North America, and executives said they expect that revenue to decline from the first quarter to the second.
The oil-market decline caused Halliburton to take US$1.2 billion in charges in the first quarter, including severance and write-offs, acting chief financial officer Christian Garcia said.
“Over the last two quarters, we have reduced our head count by approximately 9,000 employees, more than 10 percent of our global head count,” he said on the conference call.
Garcia added that additional moves were likely in the second quarter, but would probably result in much smaller charges.
Halliburton said on Monday that it lost US$643 million, or US$0.76 per share, in the first quarter compared with net income of US$622 million a year earlier. Still, the results excluding US$823 million in severance, write-downs and other one-time costs amounted to an adjusted profit of US$0.49 per share, beating the forecast of US$0.41 among 19 analysts surveyed by Zacks Investment Research.
Revenue fell 4 percent to US$7.05 billion, higher than analysts’ estimate of US$7.03 billion.
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