Canadian Manufacturing

Halliburton has cut 6,000 jobs in Q1, and prospects aren’t improving

Halliburton said that it will take a US$2.1 billion after-tax restructuring charge for severance costs and writing down the value of assets


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HOUSTON—Halliburton Co. said April 22 that it cut more than 6,000 jobs in the first quarter, continuing a purge at the oilfield-services company that has reduced its workforce by one-third since late 2014.

The company revenue in the first quarter fell to $4.2 billion, a 40 per cent decline from the first quarter of 2015. That’s in line with the average analyst estimate of $4.2 billion, according to FactSet.

Halliburton has been slammed by the slowdown in drilling since oil prices began falling in mid-2014. It is more concentrated in North America than rival Schlumberger Ltd., and that has hurt it.

Houston-based Halliburton expects industry spending on drilling and production in North America to drop 50 per cent this year after a 40 per cent decline last year.

The CEO said he was bracing for a lag before drilling activity picks up. And even then, his company will be under pressure to control costs.

“Even when operators feel better about the markets, they will still face issues of balance sheet repair and we believe they will be cautious in adding rigs back” and at lower production costs, Dave Lesar said.

Halliburton said that it will take a $2.1 billion after-tax restructuring charge in the first quarter for severance costs and writing down the value of assets.

The company also delayed its conference call with Wall Street analysts until May 3.

Halliburton faces a key deadline on April 30. That’s when either side can walk away from Halliburton’s proposed $35 billion acquisition of Houston rival Baker Hughes Inc.

The Justice Department sued this month to block the deal, saying it would hurt competition and drive up prices for consumers. Halliburton could owe Baker Hughes a $3.5 billion breakup fee if the deal falls through.


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