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Image courtesy of Baker Hughes.

Services player Baker Hughes said Wednesday it will layoff 3,500 more employees after booking a $589 million first quarter loss.

The company’s first quarter revenue fell to $4.6 billion, a 20 percent drop from the same period last year, while adjusted EBITDA for the quarter sunk 56 percent year over year to $458 million.

Baker Hughes booked a net loss of $1.35 per diluted share, or $589 million, and an adjusted net loss of $32 million, or $0.07 per diluted share, excluding $557 million in after-tax adjustments.

The adjustments included a $415 million after-tax restructuring charge tied to severance charges, facility closures asset impairments and contract terminations.

Chairman and CEO Martin Craighead said the revenue dip is a “reflection of the extreme market forces faced by our industry since late December.”

The company said market volatility has forced it to cut an additional 3,500 jobs, bringing the company’s total layoffs to about 10,500 positions or 17 percent of its total workforce.

The layoffs and other costs reductions, including the closure and consolidation of about 140 facilities worldwide, are expected to save the company over $700 million per year.

Baker Hughes spent $315 million on capital expenditures during the first quarter, down from $439 million during the same quarter last year.

The Houston-based company also spent $49 million on corporate costs in the first quarter, a $16 million year over year savings.

Baker Hughes also booked $28 million in first quarter costs tied to its pending $34.6 billion merger with Houston-based rival Halliburton.

The merger has been approved by shareholders in both companies and is expected to close late in the second half of 2015.

With the U.S. rig count still in free fall Craighead said his firm is bracing for another rocky quarter.

“Looking out to the second quarter, we expect unfavorable market conditions to persist….We will continue monitoring market conditions closely and will take actions as necessary to optimize efficiency, while retaining the capacity to flex up when market conditions improve,” Craighead said.