Baker Hughes (NASDAQ: BKR) has set out a plan to reform its four business lines into two, in a bid to enhance profitability and grow.
The two new segments will be Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET).
The plan should provide cost reductions of $150 million, the company said, and maximise shareholder value.
“We have continuously looked to ensure Baker Hughes can operate in any environment and play a clear role in helping to address the Energy Trilemma – balancing energy security, sustainability, and affordability,” said Baker Hughes chairman and CEO Lorenzo Simonelli.
“Today, we are taking a deliberate next step in our strategic journey to transform and simplify our operations and position Baker Hughes for the future.”
The transformation will take place on October 1.
“We do expect some roles to be eliminated to avoid duplication of responsibilities and simplifying our operations,” said a Baker Hughes spokesperson.
“We do not expect role reductions to be a significant part of our workforce, focusing primarily on duplicative corporate and business functions.”
He went on to say the plan was a “global reorganization and is not directly focused on any one location, but rather all parts of the company where we believe reductions need to take place to help meet our $150 million cost reduction goal.”
The impact on the UK and Scotland was unclear.
Simonelli went on to say the new structure “will allow us to deliver the technologies that the energy transition will demand by further strengthening our existing customer relationships and allowing more operational flexibility, maintaining size and scale to maximize technology investments and capital returns to our shareholders.”
OFSE will cover the current Oilfield Services (OFS) and Oilfield Equipment (OFE) product lines.
IET will include the current Turbomachinery & Process Solutions (TPS) and Digital Solutions (DS) companies.
Baker Hughes said it identified these two units in 2021. The aim, it said, is to become the pre-eminent energy technology company.
Maria Claudia Borras, who headed the OFS unit, will become executive vice president of OFSE. Rod Christie, who led TPS, will become EVP of IET.
Neil Saunders, the UK-based EVP of OE, will leave the company at the end of the year.
Simonelli said the transformation plan was possible only because of the commitment of the entire leadership team.
“I want to thank our departing leaders for their significant contributions towards delivering our strategy as they pursue new opportunities.”
Updated at 5:18 pm with comment on job losses.