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If one number summarizes the oil price meltdown, it’s 74,119.
According to Forbes, that’s how many oil jobs have been lost in 2015 as of March 18. It’s a massive hit considering about 600,000 people work in the U.S. energy industry.
While layoffs affect office and high-skilled employees, it’s mostly the workers laboring in the fields who are at risk.
“The closer your job is to the actual oil well, the more in jeopardy you are of losing that job,” said Tim Cook, president of PathFinder Staffing in Houston, to The Wall Street Journal. “Each time an oil rig gets shut down, all the jobs at the work site are gone. They disappear.”
Here’s a chart-by-chart breakdown of how deep the numbers really go…
How Many Oil Jobs Have Been Lost in 2015, Chart No. 1 – Oil Field Services
The largest layoffs come from the largest companies – and the oil field services sector is chock full of them.
As of May 2014, the combined workforce of Schlumberger Ltd. (NYSE: SLB), Halliburton Co. (NYSE: HAL), and Baker Hughes Inc. (NYSE: BHI) makes up 43.2% of U.S. energy employees. That number will become more significant once theHalliburton-Baker Hughes merger finalizes sometime this quarter.
The oil field services sector has laid off close to 59,000 workers, with these three giants slashing the most.
Schlumberger is the top chopper with 9,000 layoffs. The company recently announced it will soon cut an additional 11,000 jobs. That brings its total 2015 layoffs to 20,000, or 15% of its employees.
Weatherford International Plc. (NYSE: WFT) has cut 8,000 jobs so far. Baker Hughes has laid off 6,991 employees and Halliburton has gotten rid of 6,620 employees.
The reasons are clear in the Q1 earnings reports. Halliburton posted a 4% year-over-year revenue decline due to a constantly falling rig count. Baker Hughes reported a loss of $589 million, or $1.35 a share. Schlumberger saw the worst numbers with first-quarter profit plunging by 39%.
“The abruptness of the fall in activity, particularly in North America, required us to take additional actions,” said Schlumberger CEO Paal Kibsgaard in a statement.
Here are two more charts illustrating how many oil jobs have been lost in 2015…
How Many Oil Jobs Have Been Lost in 2015, Chart No. 2 – Exploration and Production (E&P)
The E&P sector focuses on finding, producing, and merchandising different types of oil. It’s typically known as the upstream area of the oil industry and takes the highest risks when it comes to supply and demand.
Although they take high risks, E&P companies have only laid off about 8,362. That’s 85.8% less than the oil field services sector.
French giant Total SA (NYSE ADR: TOT) started cutting jobs after reporting a $5.66 billion net loss for Q4 2014. It announced it will only become profitable at $70 a barrel. The company has laid off 2,000 workers as of March.
Sasol Ltd. (NYSE ADR: SSL) has cut 1,500 jobs as part of capital expenditure cuts and a dividend reduction. Top Canadian player Suncor Energy Inc. (NYSE: SU) has slashed 1,000 jobs and $1 billion from its budget. The smallest cuts have come from BP Plc. (NYSE ADR: BP), which has only laid off 555 workers.
The budget cuts also lowered stock prices during the first quarter. Total SA and Sasol fell 3% and 10.4%, respectively, while Suncor shares dropped 8%.
How Many Oil Jobs Have Been Lost in 2015, Chart No. 3 – Manufacturing
Steel companies manufacture all of the oil industry’s equipment. These firms make everything from drilling pipe and tubing to wellheads and surveillance instruments.
Manufacturers are less affected by the price crash because they don’t just rely on the oil industry for business. U.S. Steel Corp. (NYSE: X) not only makes pipelines but also automotive, appliance, and construction products. Tenaris SA (NYSE ADR: TS) also produces tubes for industrial applications outside the energy market.
U.S. Steel laid off 3,827 workers in the first quarter – roughly 53.4% of the sector’s job cuts. Paris-based Vallourec SA slashed 1,400 jobs. Luxembourg-based Tenaris and MRC Global Inc. (NYSE: MRC) cut 680 and 270 jobs respectively.
More on Oil Prices: Investors fear that the tentative agreement with Iran will flood the market with oil and further lower the price. Now, that’s what pundits will tell you if they have 30 seconds of airtime to say something. Here’s why they’re wrong and what to really expect…
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