Schlumberger Ltd. and Halliburton Co., the top two oilfield-services companies in the world, said they are cutting jobs during a slump in oil and natural gas exploration spending as economies slow. Schlumberger, with headquarters in Houston and Paris, said it cut 1,000 jobs in North America yesterday, while Halliburton, also based in Houston, said it is cutting an undisclosed number of positions.
Schlumberger said the cuts, amounting to 5 per cent of its workforce and began Wednesday, are in response to a global slowdown in oil and gas drilling due to slumping energy prices and falling demand for oil due to the weak economy. Among the jobs being cut at Schlumberger are administrative support positions, field operations personnel and contract workers.
"It's the result of reduced levels of activity," Schlumberger spokesman Stephen Harris said, who said the cuts would affect everyone from workers in the field to administrative support positions at the company's Houston headquarters.
Halliburton also has confirmed it will begin laying off workers but hasn't said how many or when. Last month, Bernard Duroc-Danner, CEO of Weatherford International Ltd., the fourth-largest services firm, said job cuts would likely be unavoidable amid a sharp downturn in North American activity.
''Our objective is to minimize personnel reductions during these tough economic times,'' Diana Gabriel, a Halliburton spokeswoman, said in an e-mailed statement. ''However, there will be positions eliminated.''
The Houston Chronicle reported Schlumberger's job cuts earlier on Friday, and the Halliburton reductions were reported earlier by the Wall Street Journal. Schlumberger had about 80,000 employees worldwide as of 31 December 2007, according to filings. Halliburton has about 51,000 employees.
During the last quarter, crude fell from around $100 a barrel to less than $40. That was in sharp contrast to the rest of 2008, when oil prices soared and producers posted record profits. Crude prices had touched the $150 per barrel mark as recently as July. But in the wake of oil's plunge, oil and gas companies have since scrapped many exploration and production projects, reducing work for companies like Halliburton Co. and Schlumberger. About 150 to 200 oilrigs have gone offline over the year-ago period.