11,000 More Oil and Gas Layoffs Announced

More oil and gas employees will be laid off as a result of the continuing slumping price of oil.

Schlumberger announced its first-quarter results for 2015 and it shows that revenues continue to slide. As a result the company will lay off 11,000 employees; this comes on the heels of the 9,000 employees who lost their jobs late last year. On Thursday the company made the announcement, pointing to the weak price of oil.

“In spite of the detailed preparations we made in the fourth quarter, the abruptness of the fall in activity, particularly in North America, required us to take additional actions during the quarter. These included the difficult decision to make a further reduction in our workforce of 11,000 employees, leading to a total reduction of about 15 per cent compared to the peak of the third quarter of 2014,” said Schlumberger Chairman and CEO Paal Kibsgaard.

First quarter earnings per share fell 12 per cent to $1.06 beating estimates of 89 cents a share. But revenue slid 9.3 per cent to $10.25 billion, below the estimate of $10.42 billion.

“Looking at the macro environment, the global economy continues its steady recovery, and oil demand is still expected to increase by one million bbl/d in 2015. However, the significant reductions in E&P spend are starting to impact supply in both North America and internationally, and supply is expected to tighten further in the second half of the year,” added Kibsgaard.

The company has not confirmed which employees will be laid off, but in North America first-quarter revenue of $3.2 billion decreased 25 per cent sequentially. In the US and Western Canada, revenue fell on lower pressure pumping activity and increased pricing pressure, precipitated by the sharp drop in land rig count and the early onset of the Canadian spring break-up.