Oil company Baker Hughes announced its plans Tuesday to cut 7,000 jobs company-wide, according to a recent Casper Star Tribune article. The company will join Schlumberger, another oil giant operating in Wyoming, which announced last week that it plans to cut 9,000 jobs.
With these announcements came an ominous forecast for the state’s economy, which relies heavily on oil operations.
“If energy prices remain really depressed, that whole mosaic is at risk,” Bill Schilling, president of the Wyoming Business Alliance said in the article. “I think it is fair to say people are nervous.”
Roughly 75 percent of jobs in the Wyoming’s oil patch are in oilfield service, which helped the state stave off unemployment as its coal and natural gas industries took a hit in recent years. Economists said they can’t yet determine the gravity of the massive layoff, as neither Schlumberger not Baker Hughes have specified when the cuts will happen.
The state’s dwindling rig count offers little hope; nine rigs have closed in the past two weeks, leaving 47 left in Wyoming. During a conference with financial analysts, Bakers Hughes cited the 11 percent job reduction was to abrupt drops in sales.
In November, Halliburton announced its plans to acquire Baker Hughes for $34.6 billion and to cut 1,000 jobs, though a spokesperson said the cuts are unrelated to the purchase.
Though the national economic position at this time is improving— 252,000 jobs were added in December and unemployment has reached a six-year low of 5.6 percent— Wyoming’s economy certainly doesn’t mirror this success. With 13,600 Wyoming residents employed in oil field services and another 4,300 employed in drilling, the loss of thousands of jobs suggests a grim outlook for the near future.
Jim Robinson, and economist for the Wyoming Department of Administration and Information, said low gas prices have some benefits for the state. The lowered cost of travel may stimulate the state’s tourism sector, but is unlikely to make up for losses in the oil industry.
“The question is: how low do prices go, and how long to the stay there?” he said.