Darker days ahead predicted by Schlumberger leadership

So far, layoffs have yet to hit the Schlumberger operations in Oklahoma, at least what the company revealed, even though the company has cut its North American workforce by 1,500 workers. But things are expected to get worse as the company announced Friday its first quarter 2020 operations lost $7.4 billion and leadership doesn’t think the second quarter will improve.

The company attributed the loss to writing down the value of assets by $8.5 billion because of oil prices at 20-year lows and the collapse of demand created by shutdown orders during the coronavirus pandemic.

In response, Schlumberger during the quarter laid off 1,500 people in North America, cut executive pay and put most of its remaining employees on furloughs. The company also slashed its dividend by 75 percent, paying 12.5 cents compared with its previous payout of 50 cents. Yet CEO Olivier Le Peuch said the second quarter will be the “most uncertain and disruptive quarter that the industry has ever seen.”

“To reinforce our cost control and cash discipline, we are reducing our structural and variable costs, and restructuring our organization to match activity where necessary, including furloughing personnel, cutting salaries, lowering headcount, and closing facilities. In addition, our Board of Directors and executive officers have voluntarily agreed to reductions in their cash compensation. We have reduced our capital investment program by more than 30% and will allocate resources to the more resilient markets while remaining focused on capital stewardship and maintaining our commitment to a strong balance sheet.”

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