Halliburton Company (HAL) To Cut 6,500 Jobs Amid Plunging Oil Prices

Halliburton said the jobs cuts is not related to the Baker Hughes acquisition

Halliburton Company is planning to reduce the number of its workforce globally due to the declining oil prices as well as the weakening of oil& gas exploration and production.

The company’s job cuts will affect around 5,000 to as much as 6,500 employees, according report from Houston Business Journal. The workforce reduction represents 6.5% to 8% of 80,000 employees of Halliburton worldwide.

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The stock price of Halliburton closed $42.60 per share on Tuesday, down by 2.09%.

Jobs cutsnot related to the Baker Hughes acquisition

Halliburton CEO Dave Lesar previously cautioned that 2015 will be challenging for the company.

Commenting on the company’s job cuts, Emily Mir, a spokesperson for Halliburton said, “We value every employee we have, but unfortunately we are faced with the difficult reality that reductions are necessary to work through this challenging market environment. The impact will be across all areas of Halliburton’s operations.”

Mir clarified that the workforce reduction in not related to the company’s impending acquisition of Baker Hughes.  The companies entered a $34.6 billion merger deal on November, last year.

Halliburton previously indicated that it is willing to do whatever it takes to acquire Baker Hughes. The company stated that it will divest some parts of its business that generates as much as $7.5 billion in revenue. Obviously, the company is expecting that the deal go through a rigorous regulatory review.

Halliburton, Baker Hughes received second request from DOJ

Today, Halliburton and Baker Hughes announced that each received a second request for additional information from the Department of Justice regarding the proposed acquisition.

Both companies are expecting the second request under the notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976.  Halliburton and Baker Hughes are cooperating with the DOJ as it reviews the transaction, which still subject to shareholder and other approvals as well as customary closing conditions.

Energy sector job cuts

The oil prices also dropped today due to concerns regarding the oversupply worldwide. Brent crude oil dropped 3.27% to $56.43 per barrel. Last year, oil prices lost 50% of its value, and the downward trend continued last month.

Last week, a report from Challenger, Gray & Christmas, Inc indicated that 40% of the total job cuts on January were related to oil. The number of Americans who lost their jobs due to the declining oil prices was 21,322.  The energy sector slashed 53,041 total jobs last month.

Last week, Weatherford International announced its decision to lay off 5,000 employees as part of its cost-cutting measures.  Last month, Schlumberger also disclosed its plan to reduce its workforce by around 9,000. Last December, BP announced its plan to eliminate thousands of jobs worldwide.