Schlumberger Says Another Round of Layoffs Coming

Schlumberger is preparing for its second round of layoffs this year amid a global downturn in oil and gas activity that also has also pushed rivals to cut jobs.

The world’s largest oil field services company, which in January announced plans to cut 5 percent of its work force, now expects “a further reduction of a similar amount” in coming months, Chief Executive Andrew Gould was expected to say this morning at the 2009 Howard Weil Energy Conference in New Orleans, according to a prepared text of his speech.


While the first round of cuts — eliminating about 5,000 of the firm’s 84,000 global employees — should be largely completed by the end of March, Gould gave no specific timetable for the next phase of layoffs.

The move, he said, is part of a broader effort to rein in costs that will also include reducing the firm’s 2009 capital spending budget and negotiating lower prices from suppliers.

And it comes amid a recent shift in the economics of the oil and gas industry, he said.

“We are entering a period that will be very different from the last five years when our business was driven by narrow margins of excess supply with resulting effects on oil and natural gas prices,” Gould said.

“Now we are at a stage where the evolution of demand — governed by the level of economic activity — has become the overriding driver of oil and gas behavior.”

Rigzone