Houston-based TMK IPSCO plans to lay off 78 workers at its oilfield equipment plant in Odessa in May, according to notice from the company to state regulators released on Monday.
The plant threads pipe used in the drilling side of oil and gas activity, meaning the drop in the Permian Basin’s rig count immediately impacted the company, said spokesman Roger Bentley. The plant, based at 7501 Groening St., operated under the brand ULTRA Premium Oilfield Services.
“If you are not drilling, you lay off your oilfield services people and you don’t order any more pipe,” Bentley said. “That’s what’s happening to us.”
He said 31 workers would remain at the facility. Employees will be let go during a 14-day period beginning May 1, according to the release.
But the company also wrote to the Texas Workforce Commission that executives expect the mass layoff “to be temporary.”
“We are absolutely not closing up shop,” Bentley said. “. . . We are hoping that we can rescind some of the WARN notices before the effective date. But I’m not going to speculate on when things are going to return, because it depends on the price of oil and how our customers are doing.”
The Permian Basin had shed 211 rigs since Nov. 26, a day before prices entered a free fall following the decision by the Organization of Petroleum Exporting Countries not to cut production quotas in the face of global oversupply and weaker than expected demand.
That left 355 rigs running in the region as of Friday, according to the latest count from Baker Hughes. More cuts are expected as oil companies continue to curb their drilling and completion programs.
It is difficult to determine specifically how many jobs have been lost so far to the oil and gas downturn in the Odessa and Midland area because not all companies are required to release such information publicly, and the major service companies to announce cuts have not offered a regional breakdown.
“You would think it would be big,” said Willie Taylor, executive director of Texas Workforce Solutions. “. . . It’s just a sad situation we are going though.”
But Taylor also said some companies are being “evasive” in reporting mass layoffs in the area.
“When you are talking about laying off thousands, it’s not good publicity for the company,” Taylor said.
But observers expect “thousands” of jobs will be eliminated. And that does not take into account workers who see their hours reduced and pay cut.
“We know it’s happening to a lot of people out there,” Bentley said. “But it doesn’t make it any easier for anybody.”
This article was written by Corey Paul from Odessa American, Texas and was legally licensed through the NewsCred publisher network.