YOUNGSTOWN – France-based company Vallourec announced plans to reduce its workforce due to low oil prices.
The parent company of Vallourec Star, 2669 Martin Luther King Jr. Blvd., made the announcement in its financial earnings for 2014 report that was released Tuesday.
Vallourec is an international company that sells tubular products for the oil and gas industry, power generation and other industrial sectors.
The company employs 23,000 worldwide, and operates in more than 20 countries.
“The current environment is marked by a severe oil-price drop,” the company said in a news release. “In 2015, immediate and structural measures in the mills will result in a reduction of approximately 15 percent of working hours, including a reduction of approximately 7 percent of the workforce.”
Neither Vallourec Star locally nor its parent company would comment further.
The Youngstown facility started its production of small-diameter pipes for sale in the U.S. and Canadian markets in October 2012. It employs about 700.
Earlier this month, Vallourec Star announced a three-week shutdown at its pipe-producing plant. Workers at the plant would be able to schedule vacation, receive paid time off or file for unemployment. They would return to work after the blackout period.
The company also offered a six-month voluntary layoff for those interested. Health care coverage will continue during that six-month period.
The company said in late January that it was monitoring activity in the market. Oil prices have fallen since June, when oil was above $100 a barrel.
Energy analysts said OPEC’s decision last year to not cut down on production has led to a surplus in supply despite weaker global demand, causing a drop in prices.
To be profitable, analysts said domestic energy companies need a minimum of about $70 per barrel of oil. According to Bloomberg Business, the price for crude oil was floating between $49 and $59 Tuesday evening.
This article was written by Brandon Klein from Vindicator, Youngstown, Ohio and was legally licensed through the NewsCred publisher network.