(MENAFN- ProactiveInvestors) Halliburton () and () the second-and third-largest services providers plan to cut thousands of jobs as drilling activity slows further due to collapsing crude oil prices.
Halliburton which employs more than 80000 people said today that it cut 1000 jobs in its operations in the eastern hemisphere in the fourth quarter and expected its cutbacks to be “in line” with competitors by the end of this quarter. The Houston Texas-based company said it took a $129 million restructuring charge in the fourth quarter ended December 31 to "temper the impact of anticipated activity declines".
which is being acquired by Halliburton in a near-$35 billion deal said earlier in the day it would lay off 7000 employees.
also based in Houston said most of the workforce reduction would take place in the first quarter when it expects to book a one-time severance charge of $160 million to $185 million. The company which had 61100 employees as of September 30 said it was also considering closing facilities.
The job cuts which come days after () the largest oilfield-services company said it would cut 9000 jobs highlight the abrupt slowdown in drilling activity seen in the past two months.
As oil prices have fallen more than 50 percent from their summer peaks Halliburton’s and ’ customers have cut their budgets by an average of 25 to 30 percent putting pressure on the oil field service companies to reduce their rates.
Halliburton is the world’s largest provider of hydraulic fracturing a technique that blasts water sand and chemicals underground to free trapped oil and natural gas. Pricing for fracking in North America is expected to fall 20 percent by the end of this year according to PacWest a subsidiary of Inc.
The number of rigs drilling for oil in the United States fell by 55 to 1366 last week the second-sharpest weekly drop in 24 years according to data released by last week.
Meanwhile strong year-end sales and previously signed contracts at both the companies shielded fourth-quarter results from impact of the slowdown in drilling activity.
Halliburton reported a 13.6 percent boost in it fourth quarter earnings. The company reported $901 million in earnings or $1.06 per share up from $793 million or $0.93 per share a year earlier.
Halliburton's adjusted profit from continuing operations was $1.19 per share above the average analyst estimate of $1.10.
Halliburton also incurred $19 million in costs related to its pending acquisition of . The company did not elaborate today on the progress of that transaction which it expects will close in the second half of the year.
The company’s revenue also increased 14.8 percent compared to the same period a year ago to nearly $8.8 billion.
's fourth-quarter adjusted profit was $1.44 per share much higher than the average analyst estimate of $1.07 according to Capital IQ estimates. ' total revenue rose 13 percent to $6.64 billion.
Shares of Halliburton inched up 0.4 percent to $39.29 at 2:09 p.m. in New York while shares of gained 0.6 percent to $56.88.
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