Weatherford's CEO is not kidding when he describes the "brutality of length of this down cycle." His firm has felt it as much as any. "We have now gone beyond leveraging cost, efficiency and performance," the CEO says in his Q1 report.
The pace and level of the cuts has been hard to track. Estimates at the start of this year, by Swift Worldwide Resources, suggested nearly 260,000 jobs had been lost. Schlumberger, the industry's largest oilfield services provider, alone has axed 34,000 employees, or 26% of its original workforce, since November 2014, according to the Financial Times.
Last year, Weatherford's headcount reduction target stood at 10,000, however more than that appear to have been shed, with the company's roll call dropping from 70,000 listed in 2013, to down to an expected 39,000 in the core businesses and 6000 rig employees at the start of 2016, according to last year's Q1 results. Yesterday, a further 2000 were added to the pile, alongside the closure of dozens of manufacturing, operating, service and other facilities.
Outlining the firm's Q1 2016 results, CEO Bernard J. Duroc-Danner said: "In Q1, we completed 78% of our latest 6000 headcount reduction target, ceased operations at four of the nine planned manufacturing and service facilities for the year, and shut down 26 operating and other facilities in North America."
He then said a further five more manufacturing and service facilities are due to go, and another 30 operating and other facilities also expected to shut by year end.
"As we approach mid-year, we have now gone beyond leveraging cost, efficiency and performance, and we are strategically and actively safeguarding the critical segments of our core businesses and technology offerings," he said. "We believe these deliberate actions will best allow Weatherford to balance the demands of the short-term market against the gains of an eventual recovery. By preserving our deep technical capabilities and managing our global geographical footprint, we are ensuring our company's future strength. In this way, Weatherford can best respond to upcoming opportunities and further exploit incremental gains, and we expect these to surpass those of prior cycles."
He added: "The brutality and length of this down cycle has challenged the entire industry, both our customer base and our peers. During the first quarter, all of our regions and product lines suffered the brunt of this harsh industry decline. North America was very challenged, with the US reaching its lowest rig count level in recorded history, and several international markets experiencing severe seasonal downturns. We managed what we could control, to the fullest."
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