Houston-based Baker Hughes Inc. plans to begin a temporary furlough program for some employees.
“In response to challenging industry conditions, Baker Hughes has implemented a temporary 5 percent pay reduction for certain U.S. employees during the last 14 weeks of 2016, while providing those employees four additional paid holidays,” according to a statement provided by a Baker Hughes spokeswoman. “These efforts will allow us to lessen the need for additional workforce reductions while remaining focused on serving customers and maintaining safe, compliant operations.”
The pay cuts will begin Sept. 11 and last through the end of the year. Certain employees in division such as global operations, chemical operations, human resources, sales, corporate security and information technology are exempt, the Houston Chronicle reports.
Several major energy companies — and oil field services companies in particular — have cut jobs during the oil downturn.
Baker Hughes, one of the largest oil field services companies in the world, reported 36,000 employees in July. That was down from 39,000 in its first-quarter release and 43,000 in its 2015 annual report.
Locally, Baker Hughes cut just over 1,000 jobs over the past year, according to HBJ research. Overall, job cuts averaged about 11 percent for the Houston-based energy companies that have reported employment data to the HBJ for the past two years.
However, Houston’s energy sector is at the tail end of the layoff process, Patrick Jankowski, vice president of research at the Greater Houston Partnership, told the HBJ recently.
“You get to a point where you just can’t cut anymore and still have a company,” Jankowski said. “There is a sense out there that the worst is over. Companies are trying to hold on to their employees for when things turn around.”
Baker Hughes is the third-largest oil field services company in the world, after Halliburton Co. and Schlumberger Ltd., which cut 5,000 and 8,000 jobs in the second quarter, respectively.
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Indeed, the reduction technique in the salaries of staff in crises and the oil industry market strategy is being much realistic than by job cuts which lead to injustice of the people and in turn on the reputation and performance of companies that follow this approach account.
But the reduction ratio in salaries must be commensurate upwardly with high-income employees and gradually decreases with the average middle-income and to coexistence with the economic situation to enable the employee acceptance that the reduction shall be subject to cross the time of crisis.
The volatility of oil prices and its impact on the performance of service companies in fact lies in the policies of states and not ALWAYS on the concept rolling in supply and demand. This was/is a clear and historically Sticky since 1970. Until now.
But there is an ideal way to get out of this concept and reliance on long-term contractual policy by investing with smart and profitable revenue which can not be affected by the unplanned crisis and to have it in the rich countries with influence in the oil and gas, and here I do not mean the Gulf states,of course.
I can discuss such concept and fact based on professional knowledge and experience in oil and gas exploration and field development in related services and not limited to reachable connections to targets with said reality of the situation.
I think that we must not exaggerate with the cuts. In the sectoral crisis we must strive not to lose the vital technical for our industry