How does hr/management go about deciding whom to lay off?

http://www.zerohedge.com/news/2015-08-28/heres-how-long-saudi-arabias-us-treasury-stash-will-last-under-30-40-and-50-crude

The pain can be sustained for a long time until Russia & Iran cry mercy.

Based on the narrow definition of resources available to the government, we think that there is no realistic mix of debt financing and spending cuts at US$30/bbl that can decrease pressure on Fx reserves, and pressure on the USD peg would be acute if oil prices were to be sustained at this level. However, at US$40/bbl and US$50/bbl, debt financing and deep capex cuts (to bring spending 25% lower) can keep government deposits at SAMA covering 7 years and 11 years of government spending, respectively. Government spending has historically adjusted to oil prices with a variable lag. It is worth recalling that spending was 50% lower in 1988 compared to its 1981 peak as oil prices tumbled, and government spending in 2000 was at the same levels as that of 1980 in nominal terms.

Poor reviews, infractions, etc will put you at the front of the line, as will being a greenhorn or a very high salary in work that others could just as easily do who are new or less experienced. It helps if you are in a nitch that is difficult and is more experience driven rather then something anyone can learn or has learned. If you are offered a package to retire, take it. You'd be foolish not to. They are giving you a definite hint. However, even a nitch won't save you if they are desperate to survive. It depends on how ugly it will get. Lets face it, Iran is going to dump a huge glut of oil on the market and the Chinese economy is a basket case. We could see $28 to $35 oil quite easily. You can be thankful that the Saudis put troops in Yemen and this popped oil back up $3 or $4 in the fear trade. But we are at the peak of driving season and that's going to wind down quickly and demand for fuel will fall. Lot of head winds.

Big companies often make very stupid decisions because they look at numbers not at what people do. I could tell you stories that would make your hair fall out with dumb decisions that came back to haunt them in this scenario. Look out also because just as they are buying up companies that fit their new model, they are also jettisoning sections that don't. I strongly recommend that you use google searches notification system to email you every story about Schlumberger, every day. You need to stay in the know. It is amazing how many folks are clueless to the very business they survive on and pays there mortgage.

This will perk you up:

Did I ever tell you about the guy that got fired from a company (that will remain nameless) who was into computer programming. He used his own self designed programs to run everything that he did in his field (very tech stuff). So they whacked him one day for having music files on his computer. It was just an excuse to get rid of him because he made too much for that line of work (he came with a merger so his salary was way out of line with the industry). Then they sent a specialist in from another state to see what was needed to replace him. After a few hours, the specialist reported to the big bosses that all the software had erased itself, as it was required to be logged into every week or it would auto erase. Seems this is how he could do the work of three, as just one. The specialist's comment when he reported to his bosses was a simple, "We're !@#$#@#. Yes, they were. And there was nothing they could do, because he created the software, asked them if he could use it when he worked at the other company, it saved them $$$, so they were ever so glad. Boy did they regret that. You remember a few years ago all the hullabaloo about copyrights and software?

Now you make the connection.

But it get's worse. They had to actually pay the fired worker $1.4 million dollars for the software license as he had patented it several years before (several other companies also used it too in the industry, but were paying him a more nominal fee, which he jacked up through the roof for this particular nameless company.) Why? Because he could. It explained his Porsche and the Cessna (which I could never figure out how he could pay for it on $126,000 a year) and for the moment they had no other choice. They also had to bring him back as a consultant for about 2 months. He sure did smile a lot. He loved to say, "Hey, no hurt feelings, it's all good." Did I mention his boss and their boss "left the company"? Of course now, they have things written into work agreements etc so it doesn't ever happen again. It was a priceless moment where the little guy made good.

What about the sales guy in a myopic part of the oil business that makes 1 to 3 sales a year, but at $25 million dollars for the gadget. Then they pushed him out with a retirement package and promptly wiped his computer clean; you know the one with all his sales contacts, notes, data base, and information. Last I heard, they hadn't sold anything to anyone in four years. Opps.

I got news for everyone. The whole oil business is going to drastically change over the next 10 to 15 years to keep cost down.

Oh well.

Look for an upturn in oil in Mid 2017 when companies have no choice but to spend money on their fields. Also, the game has dramatically shifted now. The oil service folks want to also pump and sell the oil (not refine it mind, you as that is a huge headache). Thus you see these service companies willing to take stakes in fields in North America.

It basically is the robber baron approach. Watch now as all the big guys walk in and buy up these fields for pennies on the dollar.

October is the beginning of when all the loans and bond payments start to come do. Look for lots of defaults all over the place (globally too).

No, the collapse in oil is not because of the Saudis and market share, but rather bankrupting certain Putarian countries who don't wish to play the game with Dollar, Inc.

I seem to recall this happened in 1986 when oil tanked and a big former Soviet country fell apart rather quickly at $13 a gallon oil.

Oh and make no mistake about it, when the price does go up in oil, and it will, I doubt you will ever see it under $150. With all those drilling rigs being turned into razor blades for scrap, the upswing will be just as rough as the down swing.

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