Schlumberger job cuts 2020 : US oilfield services company to slash 21,000 jobs

Schlumberger job cuts 2020 : US oilfield services company Schlumberger said that it is slashing more than 21,000 employees, or nearly one-fifth of its workforce, after taking a loss of $3.62 billion in the second quarter of 2020 owing to low oil demand caused by the coronavirus crisis.

The company had allocated $1bn for severance associated with the job cuts with the vast majority of this charge anticipated to be paid in the second half of 2020.

Schlumberger’s worldwide revenue declined 35% to $5.35 billion in Q2 2020 compared to $8.26 billion in Q2 2019.

In North America, the revenue of the oilfield services provider plunged by 58% to $1.18bn compared to $2.8 billion in the same quarter of 2019. The international revenue for Schlumberger was down by 24% at $4.1 billion compared to $5.4 billion in the year before quarter.

Schlumberger job cuts 2020 : US oilfield services company to slash 21,000 jobs. Photo courtesy of WhisperToMe/Wikipedia.org.

Schlumberger job cuts 2020 amid business restructuring

The oilfield services company has now embarked on a restructuring process to transform into a lean organiztion, while speeding up the implementation of its performance strategy with capital stewardship, fit-for-basin, and digital as main drivers of success, said Olivier Le Peuch, CEO of Schlumberger.

By reorganizing its business, Schlumberger is said to permanently eliminate $1.5 billion of structural costs annually. The oilfield services contractor will combine its 17 product lines into four divisions, and will structure its geographic organization around five major basins of activity while optimizing its management structure.

Olivier Le Peuch also said that progress has been significant when it came to boosting the results of previously underperforming business units, while the company has increased the adoption of digital technology.

Commenting on Schlumberger job cuts 2020 and Q2 2020 results, Olivier Le Peuch said: “This has probably been the most challenging quarter in past decades. Schlumberger second-quarter revenue declined 28% sequentially, caused by the unprecedented fall in North America activity, and international activity drop due to downward revisions to customer budgets accentuated by COVID-19 disruptions. This speaks volumes about an industry confronted with historic oil demand and supply imbalances caused by demand destruction from the global COVID-19 containment effort.”

Schlumberger serves the oil and gas industry with its reservoir characterization, drilling, production, and processing technologies. The oilfield services company sells its products and services across 120 plus countries and had a workforce of around 85,000 people as of the end of Q2 2020.