Schlumberger Cuts 9000 Jobs

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Oilfield services major, Schlumberger, has decided to reduce its overall headcount, in response to lower commodity pricing and anticipated lower exploration and production spending in 2015.

The company, which employs approximately 120,000 people in more than 85 countries, recorded a $296 million charge associated with a headcount reduction of approximately 9,000.

Earlier in December, the company announced it will be slashing its workforce but the exact number was unknown.

Schlumberger also announced plans to restructure its WesternGeco marine seismic fleet in order to lower its operating costs. Three previous-generation acquisition vessels with lower towing capacity and higher operating costs will be converted to source vessels allowing for the termination of two third-party source vessel leases and the retirement of two owned source vessels.

As a result of this restructuring, Schlumberger performed an impairment test and determined that the carrying values of certain of its vessels exceeded their respective fair values by $590 million.

In addition, Schlumberger recorded a $472 million currency devaluation charge in Venezuela.

However, the company generated full-year 2014 revenue of $48.6 billion, an increase of 7% year-on-year and grew for the fifth consecutive year.

The company expects its 2015 capex (excluding multiclient and SPM investments) to be $3.0 billion. Capex for the full year 2014 was $4.0 billion.

Schlumberger CEO, Paal Kibsgaard, commented: “In this uncertain environment, we continue to focus on what we can control. We have already taken a number of actions to restructure and resize our organization that has led us to record a number of charges in the fourth quarter. We are convinced that performance must now be driven by an accelerated change in the way we work through our transformation program.”

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