Schlumberger to cut more jobs, expects delay in U.S. land drilling recovery

April 16, 2015, 10:07 PM UTC
The exterior of a Schlumberger Corporation building is pictured in West Houston
The exterior of a Schlumberger Corporation building is pictured in West Houston January 16, 2015.
Photograph by Richard Carson—Reuters

(REUTERS) — Schlumberger Ltd, the world’s No.1 oilfield services provider, said it would cut a further 2,000 jobs and that it expects a recovery in U.S. land drilling activity to be delayed.

The company said on Thursday that it now plans to cut 11,000 jobs, higher than the 9,000 jobs it had planned to cut in January.

Schlumberger (SLB), which provides drilling technology and equipment to oil and gas companies, said first-quarter revenue fell 19 percent from the fourth quarter, blaming lower drilling activity and pricing, especially in North America.

“We believe that a recovery in US land drilling activity will be pushed out in time, as the inventory of uncompleted wells builds and as the re-fracturing market expands,” Chief Executive Paal Kibsgaard said in a statement on Thursday.

“We also anticipate that a recovery in activity will fall well short of reaching previous levels, hence extending the period of pricing weakness.”

Schlumberger’s customers have slashed capital budgets for 2015 and reduced drilling activity to adjust with the decline in global crude prices, forcing the company and its peers, Baker Hughes (BHI) and Halliburton (HAL), to cut thousands of jobs last quarter.

Schlumberger said revenue fell nearly 9 percent to $10.25 billion in the first quarter ended March 31.

Revenue from its international business, which accounts for two-third of total revenue, fell 8 percent.

Net income attributable to Schlumberger fell to $975 million, or 76 cents per share, from $1.59 billion, or $1.21 per share, a year earlier.