Baker Hughes plans to cut 7,000 jobs by March, citing the drop in oil prices for the move.
In a conference call on Tuesday, company CEO Martin Craighead said “This industry can’t simply hope and wait for oil to climb back over $100 a barrel. Instead, we must adapt to a new reality of sustained lower commodity prices.”
Inquiries on impacts to Baker Hughes here in Alaska have not yet been answered but we will continue to pursue those answers.
The most common blend of US oil, West Texas Intermdediate crude oil, is priced around $45 per barrel, less than half of what it was valued as in September of 2014. Bank of America forecast oil prices could drop as low as $31 per barrel in 2015.
As we previously reported, Baker Hughes is being acquired by Halliburton for $34.8 billion later this year, a move which originally spurred excitement from Dave Lesar, CEO of Halliburton…
Lesar: “Well strategically the transaction will combine two highly complementary businesses and create the leader in global oilfield services with several strategic benefits: a Houston based global oil services champion, manufacturing and exporting technologies, and creating jobs and serving customers around the globe.”
Halliburton is the world’s second largest provider of oilfield services. The merger will strengthen the competition between Halliburton and Schlumberger, the world’s largest oilfield services provider who also announced job cuts last week.
During the same conference call where the job cuts were announced, Baker Hughes’ CEO Craighead said “This is really the crappy part of the job, and this is what I hate about this industry frankly. This is the industry, and it’s throwing us another one of these downturns, and we’re going to be good stewards of our business and do the right thing. But these are never decisions that are done mechanically.”
