Houston-based services giant Schlumberger said Friday it will cut 11,000 jobs as the company prepares for a prolonged drilling slump.
The cuts will account for about 15 percent of the company’s total workforce compared to the peak of the third quarter of 2014.
“In spite of the detailed preparations we made in the fourth quarter, the abruptness of the fall in activity, particularly in North America, required us to take additional actions during the quarter,” Schlumberger chairman and CEO Paal Kibsgaard said.
Further details about the layoffs have not been disclosed yet.
The new round of layoffs will bring the company’s total number of job cuts to 20,000 this year.
Kibsgaard said that while he expects U.S. onshore drilling to bounce back as the inventory of uncompleted wells builds and the re-fracturing market expands a recovery is likely to”fall well short of reaching previous levels, hence extending the period of pricing weakness.”
Last week the U.S. rig count fell below 1,000 for the first time since 2009.
Schlumberger posted a first quarter net income of $975 million, up from $302 million in the fourth quarter of 2014, and booked a first quarter revenue of $10.24 billion, a 9 percent year-on-year drop.
The company’s North American operations saw first quarter revenues fall to $3.22 billion, a 25 percent drop from last quarter, due to plummeting U.S. rig counts and the early onset of the Canadian spring break-up.
Schlumberger’s activity level in the U.S. Gulf of Mexico held steady from last quarter but revenue tied to region declined due to “lower multiclient seismic license sales.”
The company’s international revenue fell to $6.88 billion dollars, down from $8.21 billion in the fourth quarter of 2014.
The company also saw first quarter free cash flow leap 74 percent over last year to $1.2 billion, excluding restructuring payments.
First quarter restructuring and other charges amounted to $0.30 per share.