Halliburton has told employees at its global headquarters in Houston that they are being furloughed to help the company address the new realities of the oil and gas market. The move is understood be impact about 3,500 employees.
In less than 3 months, West Texas Intermediate prices have fallen 57% to a multiyear low of about $27. The fall has been much harder for the world’s second-largest oilfield service company which has seen its share price drop 75% since the start of the year—a drop from $24.68 on 2 January to $6.14 by close of the trading day 17 March.
Halliburton spokesman William Fitzgerald issued the following statement on the forced reduction actions the company is taking:
“To best position our company in the current environment, Halliburton is implementing a mandatory furlough for employees at its North Belt campus in Houston beginning 23 March. During the furlough, which will last up to 60 days, employees will work a one-week on, one-week off working schedule and will not be paid or permitted to perform any work on behalf of the company on their week-off. Employees’ benefits, including health insurance, will remain in place during the furlough period.”
“We believe moving to this schedule will allow us to best manage costs and provide full benefits for our employees during this difficult market.”
Fitzgerald added that the company is monitoring the spread of COVID-19 around the world. All of Halliburton’s offices are open in Houston, one of the cities in the US where COVID-19 is spreading, but all noncritical employees can work from home with their supervisor’s permission.
Oilfield service firms sit squarely in the crosshairs of the industry’s widespread spending plan curtailments that have come in the wake of a price war and the ongoing demand destruction caused by the COVID-19 pandemic.
Last week, Tulsa-based Spears and Associates predicted that Halliburton’s exposure to the quickly contracting US land market will bring it major financial troubles. The market research firm said if crude prices average at $32 over the next few months, the firm’s global sales will drop from last quarter’s $4.8 billion to a second quarter earnings of $2.8 billion.
In January, Halliburton reported a $2.2 billion loss from its hydraulic fracturing service unit in North America and announced a reduction in pressure pumping horsepower by 22%.
