Schlumberger: Cutting Jobs In North America As Business Slows
Schlumberger Ltd. (SLB) is cutting an unspecified number of North American employees due to slowing demand for oil field services, a spokesman said Tuesday.
"After three years of robust and continuous growth in North America, Schlumberger is now making normal adjustment to the size of its workforce to meet the activity expected in the coming year," said spokesman Stephen Harris in an e-mail.
Oil and gas producers sharply increased spending earlier in the decade to halt declines in natural gas production and take advantage of rising oil and gas prices. Growth slowed to a crawl last year, and many are expecting little or no increase in budgets for the U.S. and Canada in 2008.
Job cuts in the oil field services sector are a natural response, said Bill Herbert, an analyst with Simmons & Co. in Houston.
"This is basically just business as usual," he said. "Not only will others follow, others have been doing this."
BJ Services Co. (BJS) is the only oil field services company with a large U.S. and Canadian market share to disclose layoffs, cutting its Canadian workforce by 19% between October 2006 and 2007. Halliburton (HAL), the leading service company in North America, is also watching its labor costs closely.
"We are seeing certain competitors bid for (U.S.) pressure pumping work aggressively in order to limit their market share degradation ... to offset this we have been very aggressive in managing our cost and head count," CEO David Lesar said in October when the company released third-quarter earnings.
Copyright (c) 2008 Dow Jones & Company, Inc.
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