By: Gerelyn Terzo
Business and Employment News
Reprinted by permission
The bleeding has yet to stop in the energy industry, evidenced by announcements from Houston-based oilfield services pair Schlumberger and to reduce their workforce by a reported 15 percent and 10 percent, respectively. Schlumberger said it will lay of lay off 11,000 workers, bringing its count to 20,000 job cuts since January, while Halliburton’s job cuts unfolded over the past couple of quarters.
According to Houston-based consulting firm Graves & Co, there have been 95,692 layoffs across the oil and gas industry since the downturn began. The tally is “conservative,” says John Graves of Graves & Co., adding that most of the oil and gas companies are small, private plays that are not expected to provide the same level of transparency for layoffs as public companies.
The energy sector has been hit by a one-two punch of a supply glut and depressed commodity prices. Meanwhile, the North American oil and gas rig count has been slashed from 1,930 in October to 954, according to Baker Hughes data, which has crippled industry revenue.
Nonetheless, there could be a light at the end of the tunnel in sight. Tim Cook, president and founder of Houston-based PathFinder Staffing, has worked in the midstream and upstream oil and gas sector for the past two decades, pointing to a handful of previous market downturns since the late ’90s, none of which lasted more than 15 months.
“This happens about every seven years,” he said. Cook suggests we should see a bottoming out in layoffs by late summer. At this time, the cuts should subside and new jobs should begin to creep back in exploration and production, followed by openings in the oilfield services segment, such as those positions lost at Schlumberger.
Cook has his sights set on two harbingers for recovery: a sustained increase in North American rig counts and higher West Texas Intermediate crude oil prices, the latter of which remain volatile but have recovered to the mid-$50 range recently.
Surprisingly, Cook continues to field calls daily from folks outside of the oil and gas industry who want to transition into it. This is a reflection of oil and gas industry salaries, which surpass the national average for comparable jobs in non-energy related sectors.
Cook has been receiving may more calls from energy sector workers who have been laid off and are hunting new employment. “A lot of them will be forced out of oil and gas,” he said. “They may take welding jobs or electrician jobs. Many of them were truck drivers and will transition to other sectors.”
While the layoffs have been coming fast and furious, Cook says job seekers remain cautiously optimistic. “Anybody in the oil and gas industry any length of time knows when the oil industry is good, it’s great. And when it’s bad, it’s horrible,” he said, adding that this is just another down cycle. “We will get through this, the market will turn around again and the rig count will go up. It’s not the end of the world.”
- 20 May, 2015
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