US companies announce further layoffs amid prolonged low oil prices, RigZone reported.
Traditionally, low oil prices were seen as a boost to US economic growth. Cheap oil had previously helped the country, which used to be a net importer of oil and gas. However, the US is currently one of the largest oil producers, which translates into economic downturn when faced with the existing low oil price business environment, The Conversation explained.
The overall picture of US oil production has changed dramatically over the past 10 years, with North Dakota now producing more oil than Alaska for instance. Combined with the growth of the natural gas industry from fracking, the US has become self-sufficient in meeting domestic demand.
With energy prices drop, US states heavily reliant on the oil and gas industry suffer as companies halt their investments and expansion projects, in addition to idle production and decline in jobs.
Oil service companies such as Schlumberger and Halliburton have cut nearly 25% of their workforce. C&J Energy Services will lay off up to 87 employees at its facility in Robstown, Texas. Transocean Offshore Deepwater Drilling – which laid off 200 employees in February – will cut its workforce by 80 employees more on the idle Discoverer Americas (UDW drillship), positioned in the international waters of the Gulf of Mexico. Oilfield equipment supplier, National Oilwell Varco (NOV), plans to permanently close its facility in Baytown, Texas, which will result in 107 dismissed employees. NOV previously closed its support facility in San Angelo, Texas in January, resulting in the termination of 120 employment contracts. Calgary-based Calfrac Well Services, an oilfield services company, said it would see 87 lost jobs at its district office in San Antonio, Texas.