Weatherford International Plc plans to lay off an additional 6,000 workers, about 15 percent of its workforce, over the first half of this year to cope with the worst crude market downturn in 30 years.
The latest round of cuts brings to 20,000 the number of people who have been or will be let go by the world’s fourth- largest oilfield services supplier as oil prices tumbled by more than two thirds.
“We have geared the company, and will increasingly do so, for a prolonged period of very low activity,” Chief Executive Officer Bernard Duroc-Danner said Wednesday in an earnings statement. “We are ready for as protracted a downcycle as markets will dictate.”
The oil industry has slashed more than 250,000 jobs and trimmed more than $100 billion in spending in the last year, with more cuts expected this year. The service providers, who are now embarking on their fourth round of layoffs, were the first to feel the pain and have so far contributed the largest chunk of job cuts.
Schlumberger Ltd., the world’s largest oil services provider, said last month it cut another 10,000 jobs in the fourth quarter, while its closest rival Halliburton Co. let go of nearly 4,000 additional workers.
Bigger Loss
Weatherford’s fourth-quarter net loss widened to $1.2 billion, or $1.54 a share, from $475 million, or 61 cents, a year earlier, the Baar, Switzerland-based company said. Excluding certain items, the company posted a 13-cent loss, better than the 19-cent average of 33 analyst estimates compiled by Bloomberg.
Over the past decade, Weatherford has missed analyst estimates 20 times, settled a corruption probe and spent more than $150 million in professional fees to fix errors in its accounting. And in September, it abandoned plans to raise $1 billion for an acquisition just hours after announcing them.
Wednesday’s results revealed an accomplishment that investors had long been waiting for: the $129 million in free cash flow from operations in 2015 made it the first year since 2010 that Weatherford made more money than it spent.
The cash flow figure “feels ok”, although a full cash flow statement and balance sheet was still lacking, Brad Handler, an analyst at Jefferies, wrote Wednesday in a note to investors.
The company, which has 21 buy ratings from analysts, 10 holds and 2 sells, has fallen 25 percent so far this year.
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