Schlumberger to slash 9,000 jobs as oil prices plunge

Jan 16, 2015 12:00 AM

Schlumberger, the world's No.1 oilfield services provider, said it will cut 9,000 jobs, or about 7 percent of its workforce, as it focuses on controlling costs amid plummeting oil prices.

The company said it took charges amounting to $1.77 billion in the fourth quarter including impairment charges related to its seismic business, Venezuela currency devaluation and job cuts.

Schlumberger had said last month that it would take a $1 billion charge related to jobs cuts and the writedown of some seismic vessels.

'They did say they would be cutting jobs, but the magnitude of them is definitely a shocker,' Philip Van Deusen, an analyst told.

A slew of global oil majors such as BP and ConocoPhillips have cut jobs due to a nearly 60 percent slump in oil prices over the past six months. Brent crude closed at $47.67 on Thursday. 'If oil prices stay at this level, none of these companies would just be able to adjust with one round of workforce reductions,' Robin Shoemaker, analyst, told .

Schlumberger's customers - oil producers - have slashed capital budgets for 2015 and reduced the number of rigs. The Houston-based company said capital expenditure, excluding multiclient and project management investments, is expected to be $3 billion for 2015.

Capex for 2014 was $4 billion. 'In this uncertain environment, we continue to focus on what we can control.' Chief Executive Paal Kibsgaard said.

Schlumberger, which provides drilling technology and equipment, reported a fourth-quarter profit that beat Wall Street estimates for the tenth straight quarter. Revenue rose 6 percent to $12.64 billion, mainly helped by an 18.5 percent jump in revenue from North America.

Net income attributable to the company fell to $302 million, or 23 cents per share, in the fourth quarter ended Dec. 31, from $1.66 billion, or $1.26 per share, a year earlier. On an adjusted basis, the company earned $1.50 per share, beating the average analyst estimate of $1.45 per share.

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