Baker Hughes and Halliburton hint at thousands of job cuts, as oil price slump reduces drilling activity

Oilfield service providers Baker Hughes and Halliburton are planning to cut thousands of jobs in line with a slowdown in oil drilling due to the plunge in oil prices.

"We expect our headcount adjustments to be in line with our primary competitors," Halliburton's Chief Operating Officer Jeffrey Miller said during a conference call.

The company has already shed 1,000 jobs in its operations in the eastern hemisphere in the fourth quarter. It employs more than 80,000 people.

Halliburton CEO Dave Lesar said the US land rig count has declined by 15% or 250 rigs over the last 60 days, indicating decline in oil drilling activity in the US.

Nevertheless, Halliburton's fourth-quarter net income rose to $901m (£596m, €778m) from $793m a year earlier. Halliburton is the world's largest provider of hydraulic fracturing, a revolutionary method to free oil and natural gas trapped in shale rock.

Baker Hughes earlier said it was planning to lay off 7,000 employees, with most of the workforce reduction expected to take place in the first quarter. The company expects a one-time severance charge in the range of $160-185m in the first quarter.

Lesar noted that Halliburton's near $35bn deal to acquire Baker Hughes has become "more compelling" now, and his company is committed to closing the deal.

Oil producers and companies providing drilling services have been hurt by the continued decline in oil prices. Global oil prices have fallen about 60% since June 2014.

A number of oil producing companies have halted new drilling projects and announced job cuts given the weak market conditions.

Schlumberger NV, market leader in the oilfield services sector, earlier said it would cut 9,000 jobs due to the slowdown in drilling.