Schlumberger to cut more jobs

Offshore staff

HOUSTON Schlumberger has revealed plans to cut at least thousands more jobs before the year is over, as reported by the Houston Business Journal, and stated in a Form 8-K filed with the US Securities and Exchange Commission on Dec. 1.

Schlumberger can expect to incur pre-tax restructuring charges of $350 million as the result of further reducing its workforce, according to the filing. The form did not, however, contain specific job cut numbers.

For 1Q 2015, the company reported pre-tax restructuring charges of $390 million to coincide with a workforce reduction of 11,000 employees, said CEO Paal Kibsgaard in the first-quarter earnings call, Houston Business Journal stated.

From the previous restructuring charge figure reported, it can be extrapolated that the number of job cuts to take place before the end of 4Q 2015 will be in the same neighborhood.

The language in the SEC filing reflects both the anticipated lower-for-longer oil price environment, which could further decrease drilling activity, and a goal of streamlining.

“(Schlumberger) will further reduce its workforce in light of expected reduced activity for 2016 and to streamline its support structure,” the filing said.

The “support structure” language could be a nod to redundant back office functions that might result from Schlumberger’s $14.8-billion acquisition of Cameron International. As Randall Grace, partner responsible for energy investments at Chilton Capital Management, observed in August, when any two corporate offices join in Houston, various operations jobs are typically re-evaluated.

The last tally of job cuts that Schlumberger reported came at the end of 1Q 2015, totaling 20,000 since the company’s peak in 2014, according to the Houston Business Journal.

12/08/2015

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