Posted on 09/08/2015 6:19:54 AM PDT by thackney
The oil bust’s toll on corporate payrolls continues to grow.
Job cuts in the petroleum industry reached nearly 196,000 globally last week, according to a Houston energy consultant, after ConocoPhillips said it would cut 10 percent of its workforce and other energy firms announced more layoffs.
Nearly half of the oil industry’s reductions over the past year have come from the oil field service industry, firms that provide oil and gas producers with drill bits, well casing, hydraulic fracturing pumps and other technology, says John Graves, president of Graves & Co., who has tracked the layoffs closely.
Though most of the reductions have come from oil field service firms so far, analysts believe oil producers could spur the next wave of layoffs.
“While there remains additional force reduction potential in the OFS sector, upstream organizations within the producer community appear to be just getting started with their layoff programs,” analysts at Tudor, Pickering, Holt & Co. said in a note to clients Tuesday.
The analysts said a handful of other producers have cut general and administrative costs, but most haven’t indicated whether layoff are taking place or not. There is also anecdotal evidence firms are rescinding offers to new hires in petroleum engineering, they said.
Whether the topic receives much attention (either through proactive presentation or responses to investor questions) remains to be seen,” they wrote. “We do believe G&A improvement is on the short list of measures upstream companies are urgently evaluating in this environment.”
Graves has kept a tally of layoff announcements since they began last year and has calculated additional cuts based on the hundreds of drilling rigs that oil companies have sidelined in recent months. He estimates each rig keeps roughly 30 workers employed.
Oil field service firms have shed 97,100 employees since late last year, Graves estimates. Contractors that lease drilling rigs to oil companies are the next largest group with 36,800 job cuts, followed by oil and gas producers with 29,100 and large-equipment makers and other suppliers with about 26,500. Refineries and pipeline operators together account for another 6,400 cuts.
Houston-based ConocoPhillips said last week it plans to cut 10 percent of its workforce around the world, about 1,800 jobs, plus another 1,000 contractors. In late July, Chevron disclosed it would cut 1,500 jobs.
In a report last week, Chicago outplacement firm Challenger, Gray & Christmas said the energy industry has announced 71,600 job cuts in the United States from January to August, compared to 8,000 in the same time last year.
Looks like the Pipe, Valve and Fitting Industry is taking a good hit.
Uh. It just might be that the world is in recession. Does anyone really believe economic statistics released by the Obama administration?
Yes along with others many don’t associate directly with oil/gas. Caterpillar for example.
http://www.zacks.com/stock/news/188176/layoffs-continue-at-caterpillar-cat-owing-to-mining-slump
The US oil and gas industry kept Obama’s Depression from becoming a 1929 redux. The Left couldn’t vilify these companies and producers enough and did everything to stop them (see Keystone), while shoveling billions of taxpayer-confiscated dollars to their cronies in their “renewable energy” scams. Obama even is promoting Iran’s oil economy in his Muslim Dreamer/ Executive Order Peace Plan with Iran, further bringing down the domestic energy market.
What other segment of the economy will prop up this nonexistent recovery, now that oil and gas have been beaten down by the Democrats?
I would have guessed FAR higher than 200K. From talking with friends, upstream is in free fall right now. Not only are the drilling and pipeline companies laying off, but the client big oil companies are laying off direct employees in large numbers.
Kind of glad I’m working down stream right now.
I don’t see how that number includes all the indirect jobs.
General Engineering firms, construction contractors, heavy equipment suppliers, etc...
The drop in Texas rig count alone should account for that number, but I’m guessing tha is just the lay-offs of directs by the client companies. I’ve been told Apache (Exxon’s upstream drilling company) laid off half or their directs.
Apache is not part of ExxonMobil. They are an independent company.
http://www.apachecorp.com/About_Apache/History/index.aspx
Thought they were... thanks for the clarification.
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