Slumping oil prices have been a benefit at the pumps, but its wreaking havoc on our nation's energy workforce.
Amid a 55% plunge in crude oil prices since last June, there have been roughly 91,000 energy sector layoffs announced since late December.
Workers in Texas and North Dakota have felt the brunt of the pain according to analysts at Moody's Analytics.
According to the Bureau of Labor Statistics, some 600,000 work in the U.S. oil and gas sector. With industry layoffs approaching 100,000, the economic impact is huge. These are high-wage jobs being lost.
The U.S rig count has fallen by more than 50% since October. For every rig idled, about 40 people lose their job. The average pay package for drilling rig workers is $100,000.
More layoffs are expected, and that's troublesome.
"Without question, the increased announcements of layoffs this year has been in energy extraction," Steven Pressman, professor of economics and finance at Monmouth University in West Long Branch, N.J., told Money Morning. "Worrying people right now are the layoffs yet to come. That unknown is unsettling, and will weigh on the economy."
Warnings about unstainable debt held by energy companies and a burst of bankruptcies are expected to result in more pink slips.
More Energy Sector Layoffs Ahead in 2015
On March 18, Quicksilver Resources Inc. (OTCMKTS: KWKAQ) filed for Chapter 11 bankruptcy protection. In regulatory filings, the energy company said it had $2.35 billion in debt and $1.2 billion in assets. Management said it would face a "potential liquidity shortfall" in the first quarter of 2016, for reasons including its mountain of debt and the oil crash.
Dune Energy, a small Houston-based oil and gas producer filed for bankruptcy protection in federal court on March 9. Dune's bankruptcy filing came less than a week after Houston-based Cal Dive, an offshore oil services company, filed for bankruptcy protection.
Here's a look at some of the most notable year to date energy sector layoffs...
2015 Energy Sector Layoffs - 91,000 and Counting
Apache Corp. (NYSE: APA) began laying off workers worldwide in mid-January. The oil company didn't say precisely how many workers will be let go. They did, however, peg the number at around 5,000. That's about 5% of APA's workforce. A slowdown in activity and a budget reduction amid falling oil prices were cited.
Baker Hughes Inc. (NYSE: BHI) and Halliburton Co. (NYSE: HAL) agreed in November to merge in a $34.6 billion deal. Early this year, Halliburton said it's cutting 1,000 jobs. Baker Hughes, meanwhile, is laying off 7,000. That's 11% of its workforce. Zero Hedge shared this startling stat: When it comes to pay, each Baker Hughes job is equivalent to about 10 waiter and bartender jobs. Those service jobs have been the basis of America's job "recovery."
Schlumberger Ltd. (NYSE: SLB) reported Jan. 15 it would cut 9,000 jobs. That's 7.3% of its 120,000-person workforce. The cuts were announced "to better align with anticipated activity levels for 2015." Slow drilling activity due to oil's steep price drop was cited.
British Petroleum plc (NYSE: BP) said on Jan. 28 it will lay off workers from its Houston office complex, where some 6,000 are employed. BP hasn't said how many jobs are being cut, but said some employees have been notified. BP attributed the layoffs to falling oil prices, adding more job cuts are expected.
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Chevron Corp. (NYSE: CVX) announced on Jan. 22 it will cut 162 jobs from its Appalachian natural gas exploration unit. The move represented the first major layoff to hit Marcellus shale operations since oil prices began falling last year.
Civeo Corp (NYSE: CVEO), a provider of housing for oil workers, laid off more than 1,000 workers at the start of 2015. CVEO primarily houses workers in the Canadian oil sands industry, a previously red-hot area of the North American economy reliant on lofty oil prices to turn a profit.
Conoco Phillips (NYSE: COP) reported March 31 it has begun laying off people at its former corporate headquarters in Bartlesville, Okla. The company wouldn't confirm how many workers are caught up in the reduction, but estimates peg it at dozens. COP is laying people off companywide, including at its Houston base.
Nabors Industries Ltd. (NYSE: NBR) reported March 3 it has cut 3,480 jobs. That's 12% of the Bermuda-based driller's 29,000 workforce. Nabors' active U.S. rig count is down 32% from its 2014 peak.
United States Steel Corp. (NYSE: USX) - though not technically in the energy sector - announced March 26 the temporary idling of its plant in Granite City, Ill. The move, spurred by reduced demand from the oil and gas industry, puts 2,080 employees out of work.
Related Articles:
- USA Today: Cheap Oil Prices Chop Jobs by Thousands