By Andy Heong
Schlumberger Ltd, the world’s no.1 oilfield services provider, said it will cut 9,000 jobs, or about 7% of its workforce, as it focuses on controlling costs amid plummeting oil prices.
The company said it took charges amounting to US$1.8 billion (RM6.4 billion) in the fourth quarter including impairment charges related to its seismic business, Venezuela currency devaluation and job cuts.
Schlumberger had said last month that it would take a US$1 billion charge related to jobs cuts and the writedown of some seismic vessels.
“They did say they would be cutting jobs, but the magnitude of them is definitely a shocker,” Philip Van Deusen, an analyst with Tigress Financial Partners LLC, told Reuters.
A slew of global oil majors such as BP Plc and ConocoPhillips have cut jobs due to a nearly 60% slump in oil prices over the past six months. Brent crude closed at US$47.67 on Thursday.
“If oil prices stay at this level, none of these companies would just be able to adjust with one round of workforce reductions,” Robin Shoemaker, analyst with KeyBanc Capital Markets, told Reuters.
Schlumberger’s customers – oil producers – have slashed capital budgets for 2015 and reduced the number of rigs.
The Houston-based company said capital expenditure, excluding multiclient and project management investments, is expected to be US$3 billion for 2015. Capex for 2014 was US$4 billion.
“In this uncertain environment, we continue to focus on what we can control..” chief executive Paal Kibsgaard said.
Schlumberger, which provides drilling technology and equipment, reported a fourth-quarter profit that beat Wall Street estimates for the tenth straight quarter.
Revenue rose 6% to US$12.6 billion, mainly helped by an 18.5% jump in revenue from North America.
Net income attributable to the company fell to US$302 million, or 23 cents per share, in the fourth quarter ended Dec 31, from US$1.7 billion, or US$1.26 per share, a year earlier.
On an adjusted basis, the company earned US$1.50 per share, beating the average analyst estimate of US$1.45 per share, according Thomson Reuters I/B/E/S.
Shares of the company closed at US$76.63 on the New York Stock Exchange.
— by Tanvi Mehta & Sneha Banerjee
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