In a bid to bounce back from the controlled spending by oil and gas producers due to weak prices, Halliburton Company (HAL - Free Report) is slashing headcount by nearly 800 at its El Reno operation in Oklahoma. Further, it is set to close its office in the suburbs of the same city.
Haliburton also plans to lay off nearly 70 workers from its Bakersfield plant in California, attributable to the slowdown in oil and gas drilling activity.
These strategic moves come within two months of the company’s announcement of retrenching 650 employees across four states, namely New Mexico, Wyoming, North Dakota and Colorado.
This Houston-based oilfield service provider realized that in order to enhance its operating efficiency despite challenging market conditions, it has to lower costs substantially.
Halliburton previously noted that for operators in North America where oil production hit record levels, it’s more about returns now and not growth. The volatility in commodity price convinced explorers and producers to adopt a relatively conservative approach to capital expenditure programs. This shift in customer strategy is likely to induce subdued demand for oilfield services and equipment, putting much pressure on the pricing.
Halliburton Company Price
This organizational restructuring is anticipated to help Halliburton achieve its purpose of minimizing expenses and optimizing operational excellence by testing and supporting its staff.
While this tactical action might improve the profit levels of the world's second-largest oilfield services company to a certain degree, the overall sentiment surrounding the industry remains mostly pessimistic.
Apart from the Zacks Rank #3 (Hold) Halliburton, Texas-based National Oilwell Varco, Inc. (NOV - Free Report) along with Pumpco Energy Services, Inc., an affiliate of Superior Energy Services, Inc. , and RPC Inc., (RES - Free Report) confirmed reducing part of its workforce. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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