In another blow to the already shambling oil sector, Schlumberger has announced that it will be laying off another 11,000 people. This is an addition to the 9,000 workers that were already laid off in January, meaning since last summer, Schlumberger is 15 percent smaller in size. You might not have heard about Schlumberger before, but the company is very important to the oil sector, since it provides oil and gas companies with tools and other important services.
In fact, Schlumberger is so popular that the company actually is operating in 85 different counties, but it has seen such a decrease in America due to oil prices that laying off even more workers was the only option. Schlumberger isn’t alone however, because this is just the latest in a series of companies in the energy sector to layoff workers, with a lot of oil rig workers being laid off throughout the country. Baker Hughe, which is an oilfield services company was laying off 7,000 it announced back in January. Then you have Civeo, which provides the houses for the oil workers, who laid off over 1,000 workers in December. The drop in prices at the pump is actually hurting a lot of different types of jobs within the energy sector, not just the oil workers, but many companies that supply products to those companies and supply products for the job sites.
AAA just released data which showed that gas is nearly a dollar cheaper this year than it was this time last year, with the average currently sitting at $2.39. Crude oil prices did go up a little bit this week, with the price per barrel now at $56, and that is the highest of the year so far. This is still down about half of what it was this time last year, when prices were hovering between $100 and $110 a barrel. It is unlikely that prices will even get close to $100 a barrel anytime this year, and it’s also likely prices will fail to get to $80 a barrel.
The lack of real increase in oil prices throughout the past 6 months basically means that more companies, that provide various goods and services to and for the energy sector, will be laying off employees continuously throughout the year. We have not seen the worst of the layoffs in the oil and gas departments, due to the fact some companies are still working on contracts and projects. Once those contracts and projects are up though, which will likely be in a few months, those workers will possibly be out of work, since new projects are almost non-existent at this point.