Schlumberger Lays-off 8,000 More Workers, CEO Sees Darkening Before The Coming Dawn
It's always darkest before the dawn. Yes, this is an overused cliche. But it perfectly describes Schlumberger CEO Paal Kibsgaard's comments this morning on the company's 1Q earnings conference call.
Schlumberger's current outlook is a contrast between a negative short-term view (2016) and a relatively positive medium-term view (2017/2018). Kibsgaard reiterated that the industry is in the most brutal phase of the deepest financial crisis it has ever seen. He also indicated it is going to get even tougher before the market turns. But, Kibsgaard sees the stage being set now for a coming recovery, saying that the current oil market oversupply could shrink to zero by the end of 2016.
Schlumberger is bracing for the darkest phase of the downturn over the next few quarters, but the company is also increasingly confident in the coming dawn.
So Far, 2016 Layoffs At Schlumberger Total 8,000 Not 2,000
In response to a dismal first half of 2016 for oil service demand, Schlumberger laid off 8,000 more workers during the first quarter. Yesterday, many in the press reported that Schlumberger had laid off 2,000 workers during the first quarter. The confusion stemmed from the company's reported headcount, as Schlumberger's headcount moved to 93,000 as of March 31 down from 95,000 three months before.
But this morning, CEO Paal Kibsgaard clarified that some 5,500 contract workers were added to the headcount figure that weren't counted before (some contractors were reclassified over to permanent employees). So that means about 8,000 workers were released during 1Q, and Schlumberger has now released 42,000 people during the course of the downturn.