Oilfield services company Baker Hughes (IW 500/55) said Tuesday it would cut 7,000 jobs in the coming months in response to a sharp downturn in exploration activities following the oil price crash.
Baker Hughes said the cuts, amounting to about 11% of its worldwide staff, would come mostly in the first quarter of this year.
The move will cost the company up front about $160 million to $185 million in severance charges, but aims to cut costs over the medium term as the overall industry contracts in response to the more than 50% fall in oil prices in the past seven months.
Baker Hughes is also reducing capital expenditures by 20%.
"This industry can't simply hope and wait for oil to climb back over $100 a barrel. Instead we must adapt to a new reality of sustained lower commodity prices," Martin Hughes, the chairman and chief executive, told analysts in a conference call.
Last week oil services company Schlumberger said it would cut 9,000 jobs, about 7.5% of its global workforce, due to plunging oil prices that have forced petroleum companies to cut drilling budgets.
And last month Halliburton, the No. 2 oil services provider, said it would lay off 1,000 people, 1.25% of its work force, to deal with the market changes.
Copyright Agence France-Presse, 2015
