Baker Hughes increases layoffs to 10,500
HOUSTON — Oil field service company Baker Hughes says it has decided to increase its job cuts to 10,500 workers, about 17 percent of its workforce, as it works through a slump in North American drilling.
The move bolsters its planned layoffs from the 7,000-job cut it announced earlier this year. It said it has closed or consolidated about 140 facilities around the world and idled excess inventory and assets. The cost cutting efforts, it said, should save it more than $700 million annually.
The Houston firm expects the downturn to continue in the second quarter and will make more cuts if needed, said Martin Craighead, CEO of Baker Hughes, in a written statement.
“As day rates for drilling rigs have fallen sharply, so has the demand for high technology products,” he said. Baker Hughes estimates 20 percent of the wells recently drilled in the United States have not been through completion stages – processes used to gear a well up for production. Prices for oil equipment have fallen as a supply glut builds, he said.
The company posted a net loss of $589 million in the first quarter, or a loss of $1.35 a share, compared with a profit of $328 million, or 75 cents a share, in the same period last year. Baker Hughes’ first-quarter revenue fell to $4.59 billion, down 20 percent compared with the same period last year.
It took a $573 million restructuring charge related to layoffs and other cost cutting.
Baker Hughes’ layoffs bring job cuts by the three biggest oil field service firms to 39,500 so far this year. Weatherford International, the world’s fourth-largest oil-equipment firm, has separately said it plans to cut 8,000 jobs.