By Chelsey Dulaney
Baker Hughes Inc. on Tuesday said it has cut 17% of its
workforce, and the oil-field services company closed or
consolidated 140 facilities during the first quarter amid falling
oil prices.
The company also reported first-quarter results that came in
sharply below Wall Street expectations.
Baker Hughes, which had previously estimated job cuts at 7,000,
said it has now slashed 10,500 positions.
The moves, expect to reduce costs by $700 million a year, come
as tumbling oil prices are prompting customers to curtail or cancel
projects. Chief Executive Martin Craighead said he expects the
tough market conditions to continue.
For the quarter ended March 31, Baker Hughes reported a loss of
$589 million, or $1.35 a share, compared with a prior-year profit
of $328 million, or 74 cents a share. Excluding restructuring and
severance charges, among other items, the company's adjusted
per-share loss was seven cents.
Revenue fell 20% to $4.6 billion.
Analysts polled by Thomson Reuters were expecting adjusted
earnings of 46 cents a share on revenue of $5.35 billion.
"Our first quarter results are a reflection of the extreme
market forces faced by our industry since late December," Mr.
Craighead said.
Earlier this month, Baker Hughes said it suspended the quarterly
publication of the U.S. onshore well count as it seeks to cut costs
and continue publishing its closely watched weekly rig count
reports.
Meanwhile, Baker Hughes is moving forward with its deal to be
bought by larger rival Halliburton Co. The deal, struck in November
and valued at almost $35 billion at the time, underscored the new
realities for energy companies in a world suddenly awash with oil.
As a result, oil-field services companies, which are hired to drill
and pump wells, are facing less demand for their services and
pressure to cut prices.
Industry experts have predicted that firms like Baker Hughes and
Halliburton will have to shrink further as clients demand price
cuts.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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