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Weatherford International Plc Lays-Off 6,000 Workers Due To Plunging Oil Prices

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February 6
10:52 PM 2016

Weatherford International Plc has announced to cut down about 15 percent of its workforce to cope up with the crude oil downturn. The company will reportedly lay off 6,000 workers over the first half of the year in an effort to cut down its annual expense in order to shield itself from the plunging crude oil market. 

According to the company, the revenue has decreased drastically to about 46 percent and it has lost a profit of around $1.2 billion making just $2 billion due to decrease in the demand for service crews and oil equipment, according to Fuel Fix.

"This is inevitable, given the extreme cuts in both capital and operating spend by our customer base around the world," said Bernard Duroc-Danner, Chief Executive Officer on Wednesday in an earnings statement, noted Houston Business Journal. "We have geared the company, and will increasingly do so, for a prolonged period of very low activity. We are ready for as protracted a downcycle as markets will dictate," added Duroc-Danner.

The world's fourth largest oil field service company would reportedly shut down nearly nine of its manufacturing units and service facilities, however, no announcement on the details of the units have been made yet.

The oil field service giant have laid-off about 14,000 workers companywide till the end of 2015 and is currently operating with 39,000 workers around the world. The company has also shut down about 90 operating facilities based in North America as well as six out of seven manufacturing facilities in 2015. It is to be noted that the company has saved around $1.4 billion annually by closing the above units.

"This is evident in our 2015 realized annualized savings of nearly $1.4 billion and in our positive free cash flow from operations," reported Weatherford Official 2015 Annual Results press release.

"We also achieved operating income decrementals of 28% year-over-year which is well ahead of our larger peers and bears no resemblance to the decrementals achieved during the last downturn. The explanation for our performance is simple. It's all about discipline, discernment, and focus. We are a much stronger company today than we have been for a very long time, and we will strengthen further," noted the statement.

Duroc-Danner noted that oil prices could gradually increase as a result of diminishing supply. The increasing demand might play a key role in demand-supply balance thereby influence oil prices. He also stated that there are chances of recovery through the second half of the year as commodity prices stabilize.

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