Schlumberger has decided to “right size” its organization with another round of job cuts this quarter that will see the oil services giant incur an estimated restructuring charge of about US$350 million.
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Schorn. From Schlumberger. |
“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,” Patrick Schorn, Schlumberger president of operations told the Cowen and Co. Ultimate Energy Conference yesterday (1 December) in New York.
“The latest leg down in activity has led us to again evaluate our staffing levels against expected activity. Following which, we will further right size the organization based on the activity outlook for 2016 and streamline our support structure. This will result in a restructuring charge currently estimated at $350 million in the fourth quarter,” Schorn said.
Schlumberger completed headcount reductions in Q1 2015, which helped the company avoid additional restructuring charges in Q2 and Q3.
In its Q3 report, Schlumberger first revealed its intentions to implement jobs cuts for Q4, as its revenue dropped 33% to almost $8.5 billion, which the company attributed to a decline in rig activity and pricing pressure.
Cameron merger
On 16 November, the Houston-based company received unconditional clearance from the US Department of Justice for the $14.8 billion Cameron International takeover. Closing is expected to occur in Q1 2016, subject to approval from Cameron stockholders, and the satisfaction or waiver of the other closing conditions. A special meeting is scheduled later this month on 17 December for Cameron stockholders to consider and vote on the proposed merger plans.
“Once the merger is closed, Cameron will join Schlumberger as a new product group on a par with our existing characterization, drilling and production groups. Integration planning, which is already very well advanced, will be straightforward, particularly as the more complex subsea technologies are already essentially integrated within the framework of the OneSubsea joint venture,” Schorn said.
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