UPDATE: Schlumberger Cuts Executive Salaries, Workforce
Schlumberger will implement salary reductions and job cuts, which is in line with its plans that include a reduction in capital spending.
Executives will take a voluntary 20% base salary reduction, starting 1 April, and worldwide support personnel will adopt unspecified “modified schedules” that reduce salaries.
A company spokesperson also said its North American business will accelerate a restructuring that includes job cuts and furloughs over the next couple of months.
Schlumberger had said it would cut capital spending by 30% from its 2019 level as it looks to reduce staff and compensation in response to the COVID-19 and its impact across the industry.
Speaking during the Scotia Howard Weil Energy Conference in late March, Schlumberger CEO Olivier Le Peuch said the magnitude of reduction depend on changes to its customer plans. The company’s capex is mostly allocated toward international markets, and more than 80% of its free cash flow is generated internationally.
Schlumberger’s North American land operations have been impacted by the decline in oil prices, and its Cameron International unit operations is starting to be impacted by the COVID-19 disruption.
Looking ahead to the second quarter, Le Peuch said the company sees a rapid reduction in rig count and completions activity for North America not seen since 2016. Internationally, the virus will impact field crews and operations with Schlumberger preparing for more logistical disruptions as countries implement more stringent restrictions.
Le Peuch added while the company accelerates its North America land restructure and a reduction in personnel and compensation, internationally they will see resources and capital focused on resilient basins.
Schlumberger already implemented a business continuity playbook globally and established alternate solutions for increasingly challenged supply chain and logistics. Since incorporating its operational response, the company said its China manufacturing/supply chain is recovering to pre-crisis levels.
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