As oilfield service layoffs hits 35%, hiring poised to restart
RYSTAD ENERGY research shows a massive workforce reduction in the oilfield service industry during 2014 to 2016, but service companies within the shale business are now starting to recruit again and are expected to do so in offshore later this year.
The North American shale industry in particular, took a hard hit with the lower activity levels. Two of the largest land drillers, Nabors Industries and Helmerich & Payne, have announced several staff reductions resulting in an overall reduction above 50%. The Big Four, all exposed to the US land market, were forced to lay off between 30-40% of their workforce. Companies exposed to more of the international market have cut more modestly, in the range of 20-30%.
"Among the top 50 service companies, around 300,000 workers or 35% of the work force, were laid off since 2014. However, the negative trend is about to turn and over the last few months we have seen more job-postings in North America from companies such as Weatherford, Nabors and Precision Drilling, among others. In late March, Halliburton announced its plan to add 2,000 jobs to the pressure pumping and cementing business," said Audun Martinsen, VP of oilfield service research at Rystad Energy.
The offshore industry in general has been more resilient, but 2016 saw a larger step-up in downsizing. FMC Technologies reduced its staff by 1,000 as an initiative of cutting costs prior to the Technip-merger, and in October 2016, Saipem revealed that 800 jobs needed to be cut in Europe. Recruitment is expected to increase once the E&P spending increases. Rystad Energy expects shale-focused operators to increase their spending by 30% in 2017, while offshore spending will grow from 2018, associated with increased FID activity.
"With more projects offshore being revived in 2017, we expect the offshore layoffs to stabilize and start to increase later in 2017. Already we see this trend in Norway and it is only a question of time before it starts elsewhere. The race for the best hands and brains has started in the industry and the companies that have laid off people in a responsible manner are likely to have a competitive edge going forward," said Martinsen.
