Schlumberger To Cut 9,000 Jobs As Oil Prices Plunge

Oil services group Schlumberger is to cut 9,000 jobs, or about 7 per cent of its workforce, as it focuses on controlling costs amid plummeting oil prices. The company said it took charges amounting to $1.77 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 $1 billion charge related to jobs cuts and the write-down of some seismic vessels.

Philip Van Deusen, an analyst with Tigress Financial Partners, was quoted by to have said: “They did say they would be cutting jobs, but the magnitude of them is definitely a shocker.” A number of global oil companies such as BP and ConocoPhillips have cut jobs after a fall of nearly 60 per cent in oil prices over the past six months. Brent crude closed at $47.67 on Thursday.

Robin Shoemaker, analyst with KeyBanc Capital Markets, said: “If oil prices stay at this level, none of these companies would just be able to adjust with one round of workforce reductions.” Schlumberger’s customers oil producers have cut capital budgets for 2015 and reduced the number of rigs.

The Houston-based company said capital expenditure, excluding multi-client and project management investments, is expected to be $3 billion for 2015, compared with $4 billion the previous year. “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 10th straight quarter. Revenue rose 6 per cent to $12.64bn, mainly helped by an 18.5 per cent jump in revenue from North America.

Net income attributable to the company fell to $302m, or 23 cents a share, in the fourth quarter ended 31 December, from $1.66bn, or $1.26 a share, a year earlier. On an adjusted basis, the company earned $1.50 a share, beating the average analyst estimate of $1.45, according Thomson Reuters I/B/E/S. Shares in the company closed at $76.63 on the New York Stock Exchange on Thursday.

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