Schlumberger to Lay Off More People as Upstream Investments Disappear
Carolyn Davis December 1, 2015
Schlumberger Ltd., the world's largest oilfield services operator, plans to reduce its workforce even more on the expectation for less activity in 2016, the president of operations said Tuesday.
The industry is facing a second consecutive year of falling upstream investment "for the first time since the mid-1980s," Patrick Schorn told an audience at Cowen it received unconditional clearance by the U.S. Department of Justice in mid-November. Closing is expected early next year.
"Our business performance in both North America and internationally has displayed considerable resilience as the market continues to decline. In this environment visibility continues to be considerably reduced and we will need to manage the company on a quarter-by-quarter basis. This will mean a further reduction in the size of the workforce in the fourth quarter as we adjust resources to lower activity levels, which will result in restructuring charges in addition to a charge related to our global manufacturing and distribution network. We will also be conducting an asset impairment test in the fourth quarter and are in the process of working through all of these items."
However, the "timing gap" between higher oil prices and an increase in oilfield services activity "will depend on the reversal of financial pressure on our customers."