Slump leads Halliburton to cut 2,750 more jobs No. 1 oil service firm to remove 11% of payroll, or 10,850 jobs

Layoffs

December 30, 1998|By BLOOMBERG NEWS

DALLAS -- Halliburton Co., the No. 1 oil field-services company, said yesterday that it will cut 2,750 more jobs and take a fourth-quarter charge of $24 million, or 5 cents a share, on slumping demand for oil exploration and production services.

Halliburton fell $2.56, to $30.38, in trading of about 8.15 million shares, more than twice its three-month daily average.

Dallas-based Halliburton also said that its fourth-quarter profit would be 19 cents to 21 cents before the charge, less than the 36-cent average estimate of analysts polled by First Call Corp. Halliburton earned 58 cents in the same period a year ago. The news came after the close of U.S. markets yesterday.

"There's nothing new here, it's typical of what's going on in the [oil-services] industry," said Jeffrey Pittsburg, managing director at Goldis-Pittsburg Investment Services.

"I wouldn't call it a Halliburton stock problem, it's a group problem."

Halliburton's lower earnings stem from customers declining to pay additional costs that the company incurred building such energy-related projects as oil field production platforms in the North Sea, North Africa and Latin America, said Guy Marcus, a Halliburton spokesman.

Company profit has also been hurt by crude oil continuing to trade at almost 12-year lows.

The move brings Halliburton's total job cuts this year to 10,850, or about 11 percent of its work force.

The latest cuts follow Halliburton's announcement in October that it was increasing planned cuts to about 8,100.

"They're making sure they are lean and mean," said Pittsburg.

He said he thinks Halliburton needs to manage costs so that it will be better prepared when the oil industry recovers from the current slump in prices.

While some earlier job cuts were related to Halliburton's purchase of Dresser Industries Inc. in September for $6.2 billion in stock and debt, Halliburton's Marcus said the new firings were all related to low oil prices.

The additional oil field services job cuts will involve firings and will occur worldwide, most in the first quarter, Marcus said.

Pub Date: 12/30/98

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