A sustained downturn led to thousands of layoffs this week as companies struggle to weather the prolonged energy market slump.
Falling oil prices forced many producers to cut costs and streamline business. The International Energy Agency said oil prices may fall further this year due to low demand and an oversupply of crude.
Schlumberger cut 10,000 jobs and reported a net loss of $1 billion during the fourth quarter of 2015.
“In this uncertain environment, we continue to focus on what we can control. Throughout the year, we took a number of actions to streamline and resize our organization as we continued to navigate the downturn,” CEO Paal Kibsgaard said in a statement. ” … We believe we will emerge as a stronger company relative to industry peers and competitors once the price of oil and the market conditions in our industry turn around.”
The largest oilfield services company eliminated about 20,000 jobs earlier in 2015. Schlumberger said it plans to buy back $10 billion in stock. Its stock rose $1.86 by midday Friday to $63.31.
Falling natural gas prices took their toll on a Houston-based natural gas driller.
Southwestern Energy announced another round of layoffs Thursday. According to filings with the SEC, the company laid off 1,100 workers. Affected employees were offered a severance package and select employees were offered reduced roles within the company.
At the start of the year, Southwestern had no drilling rigs in operation. After the layoffs, shares of Southwestern Energy rose 14.2 percent.
Royal Dutch Shell and BG Group
More layoffs may come early this year.
Layoffs at Royal Dutch Shell and BG Group will reach up to 10,000 employees as the companies prepare for a $70 billion merger.
In a preliminary earning report, Shell announced it reduced operating costs by $4 billion last year and expects to trim another $3 billion in costs this year.
Halliburton and Baker Hughes
The Daily Advertiser reported Halliburton and Baker Hughes hinted at thousands of layoffs in 2016. As a result of plunging oil prices, Baker Hughes said this week it plans to lay off about 7,000 employees. That number amounts to 11 percent of its workforce.
Oklahoma’s Devon Energy stated this week it intends to layoff members of its workforce. However, the company wasn’t able to say when layoffs will occur or how many workers will be affected.
As oil hit 12-year lows earlier this month, BP announced plans to cut 4,000 jobs from upstream operations over the next two years.
On a brighter note, energy prices increased on Wall Street to end the week. U.S crude oil rose $2.13 – 7.2 percent – to $31.66 a barrel. That’s its highest price in two weeks. Brent crude made even bigger gains, rising $2.23, or 7.6 percent. Brent now sits at $31.48 as of Friday afternoon.