Baker Hughes Implements 5% Pay Cut to US Workers

Oilfield services company Baker Hughes is implementing a pay cut to its employees as the industry continues to adjust to the low oil price environment.

In an emailed statement to Rigzone, company spokesperson Melanie Kania confirmed that in response to challenging industry conditions, Baker Hughes implemented “a temporary 5 percent pay reduction for certain U.S. employees during the last 14 weeks of 2016.”

Affected employees will receive four additional paid holidays. Baker Hughes did not disclose which departments would be affected.

The pay cuts were implemented as a way to prevent further layoffs.  

Baker Hughes laid off 18,000 workers last year and 2,000 employees in 1Q 2016. The company reported revenue of $2.4 billion, according to its second quarter earnings report, down $1.6 billion (39 percent) compared to 2Q 2015.

In a post-earnings conference call July 28, Baker Hughes CEO Martin Craighead said he “didn’t subscribe to the hopeful commentary,” Reuters reported. Craighead also said he believed oil prices needed to be a minimum of the upper $50s per barrel for a sustainable recovery in North America. 

Valerie is an experienced writer and editor dedicated to providing useful and relevant career news about the oil and gas industry. Email Valerie at valerie.jones@rigzone.com

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Thomas Bath | Sep. 3, 2016
This is a very good. Baker Hughes thinks the industry will turn around soon or they would have laid off more. They want to have staff available to work when it picks up. Other companies will need to hire and train people which takes time and reduces income. Maybe other companies will take notice and not continue to cut people.

Mike | Sep. 3, 2016
This is not bad if the CEO includes himself and all the upper mgmt within this cost saving effort

Robert Gaspar | Sep. 2, 2016
Im guessing the employees getting a pay cut would prefer this to seeing coworkers being laid off. Providing extra holidays is a nice touch.

Pat | Sep. 2, 2016
To show a good example to ALL employees, shouldnt the 5% cut in pay start at the top, not just certain employees. I would also forgo all end of year bonuses until the oilfield stabilizes. I know the above are hard choices, but for the better of the company, everything has to start at the top.


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