Halliburton cut 9,000 jobs in 6 months, maybe more to come

Halliburton posts loss of $643M in first quarter

Halliburton has cut 9,000 jobs in six months and is considering more cost cutting moves.  Halliburton Facebook photo.

Halliburton Co. has cut 9,000 jobs, more than 10 per cent of its workforce, in about six months and is considering more cost-cutting moves as falling oil prices sap demand for its drilling help.

Halliburton executives disclosed the job cuts Monday on a conference call with investors. The Houston oilfield-services company reported a loss of $643 million in the first quarter.

Oil prices plunged starting last summer, leading to a decline in drilling activity. Spot prices for crude have risen slightly since early January but remain about half their level of last July.

That has led to belt-tightening across the industry as oil companies move to curb production, with oil-field services and drilling companies especially hard hit. Haliburton’s oilfield rival Schlumberger Ltd. said last week that it would cut 11,000 jobs on top of 9,000 planned job cuts that it announced in January.

Schlumberger and Halliburton help map underground oil and gas reservoirs and drill wells for energy companies. Halliburton is a leader in hydraulic fracturing, or the process of breaking underground rock formations to allow oil and gas to escape.

Halliburton President Jeff Miller said he wasn’t ready to say the worst has passed, but that such slumps usually last about three quarters.

“Once we see activity stabilize, the healing process can begin, but it takes time,” he told analysts.

U.S. drilling activity has dropped by half since November, and energy companies are pressing Halliburton to reduce fees. About two-thirds of Halliburton’s revenue comes from North America, and executives said they expect that revenue to decline from the first quarter to the second.

The oil-market decline caused Halliburton to take $1.2 billion in charges in the first quarter, including severance and write-offs, said the company’s acting chief financial officer, Christian Garcia.

“Over the last two quarters, we have reduced our head count by approximately 9,000 employees, more than 10 per cent of our global head count,” he said on the conference call.

Garcia added that additional moves are likely in the second quarter but will probably result in much smaller charges.

Halliburton said Monday that it lost $643 million, or 76 cents per share, in the first quarter compared with net income of $622 million a year earlier. Still, the results excluding $823 million in severance, write-downs and other one-time costs amounted to an adjusted profit of 49 cents per share, beating the forecast of 41 cents among 19 analysts surveyed by Zacks Investment Research.

Revenue fell 4 per cent to $7.05 billion, higher than analysts’ estimate of $7.03 billion.

Halliburton shares rose 96 cents, or 2 per cent, to close at $47.85. They have gained 22 per cent in 2015 but are down 36 per cent from their 12-month peak last July.

The Associated Press