By Dan Molinski
Weatherford International, one of the biggest oil-field service
companies in the world, will lay off 5,000 employees during the
first quarter as it tries to cope with a sharp downturn in energy
prices.
The company said late Wednesday that 85%, or 4,250 of the jobs
lost, will come in the Western Hemisphere. The move is expected to
save the company $350 million annually, Weatherford management said
late Wednesday while announcing financial results for 2014.
"We are ready to react swiftly to a dramatically changing
landscape," Chief Executive Bernard J. Duroc-Danner said.
In addition, the company is offering voluntary buyouts to
certain eligible employees to further reduce its head count.
Weatherford's extensive job cuts amount to 9% of its global
workforce.
Oil prices have plunged more than 50% since June, putting
Weatherford and its peers on the ropes. Oil-field service companies
help energy companies drill new oil and gas wells, but falling
prices have jeopardized much of the sector's plans for this year.
That means Weatherford and rivals, including Schlumberger Ltd. and
Halliburton Co., are experiencing a contraction in their
business.
Mr. Duroc-Danner said the company's focus will be to ensure
Weatherford is cash-flow positive in 2015.
"This means that for every dollar of revenue we lose due to
reduced activity and pricing, we will make up for it in cost,
capital expenditure and working capital reductions," he said. "Our
team will be focused on swift market responsiveness."
Schlumberger, the biggest oil-field service company, said in
January it would lay off 9,000 employees, or 7% of its workforce.
Halliburton and Baker Hughes Inc. also have announced job cuts in
the thousands.
Weatherford has been shedding noncore businesses, cutting costs
and laying off workers as plunging oil prices have taken a toll on
oil producers and oil-field services providers.
Last year, it raised about $1.8 billion in cash, the bulk of
which, it said, it would use to pay down debt.
In the most recent period, Weatherford said it had lowered its
net debt to $7.05 billion as of Dec. 31 from $8.14 billion at the
end of the previous period.
Weatherford, meanwhile, said that its quarterly loss widened
while its revenue declined slightly. The company's bottom line
edged analysts' expectations, while the top line fell well short of
them.
Overall, Weatherford, reported a loss of $475 million, or 61
cents a share, compared with a year-ago loss of $271 million, or 35
cents a share. Excluding certain items, per-share earnings remained
flat at 32 cents.
Revenue slipped to $3.73 billion from $3.74 billion.
Analysts surveyed by Thomson Reuters were expecting 31 cents a
share on $3.89 billion of revenue.
In the latest period, North American operations, which accounts
for the bulk of the company's revenue, posted a 13% increase from
the year-ago period.
Meanwhile, the Middle East, North Africa and Asia, reported a
8.4% drop in revenue; Europe saw a 24% decline; and Latin America a
3.5% increase, the company said.
Maria Armental and Michael Calia contributed to this
article.
Write to Dan Molinski at dan.molinski@wsj.com
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