Drilling decline hits Halliburton’s local workforce
A continuing slowdown in domestic oil and gas development is taking a growing toll on Halliburton’s Grand Junction workforce.
The oil and gas energy services company already had made significant workforce cuts companywide since last year, including local layoffs, and is now undergoing a new round of layoffs that includes employees in Grand Junction, where it has been a major employer.
“We have announced to our employees that we are regrettably making further adjustments to our workforce, primarily in North America, due to current business conditions,” Halliburton spokeswoman Susie McMichael said by email this week.
“The company will continue to monitor the business environment and will continue to adjust the size of our workforce to align with current business demands as needed. We are committed to ensuring that our separated employees are treated with dignity and respect.”
The company hasn’t been releasing information on local layoff numbers for competitive reasons, she said.
Halliburton had laid off nearly 16,000 people after its employment peaked last year, but prior to the latest layoffs, she said. The nearly 16,000 layoffs amounted to about a fifth of the overall Halliburton workforce, and it hasn’t said how many more it is cutting now.
Dallas Salazar, who runs an energy consulting firm in Austin, Texas, and obtained and published online an internal Halliburton memo to employees on the new round of layoffs, said he’s learned the new cuts should be in the 20,000 range.
He said he expects cuts in Grand Junction to be sizable.
“Halliburton is needing to substantially cut its overall costs. The easiest way to do that is head count,” Salazar said.
The company employed some 550 people in Grand Junction as of late last year.
Halliburton provides hydraulic fracturing and other oil and gas services. Demand for such services has fallen as energy companies have scaled back drilling due to low oil and gas prices.
According to the internal memo obtained by Salazar and confirmed by McMichael, Halliburton is carrying out a plan to “flatten” its North American business by eliminating multiple layers of management, and is reducing “additional head count commensurate with market activity levels.”
The memo goes on, “While it doesn’t make it any easier, the company is not alone in taking these actions as similar actions are being taken throughout the entire oil and gas industry — service providers and operators alike.”
Salazar, who has relatives in Grand Junction, voiced sympathy for affected local Halliburton employees who are losing well-paying jobs and may not have skills translatable to other industries.
Mesa County Workforce Center spokesperson Angeline Roles said Halliburton hasn’t made use of the center’s rapid-response service that’s available in the case of layoffs, and the center hasn’t seen many Halliburton workers come through its doors.
She said the center is encouraging laid-off workers to come to the center to look into filing for unemployment benefits and what they can do to get back into the job market.
David Ludlam, executive director of the West Slope Colorado Oil and Gas Association, said that even with Halliburton’s reduced numbers, it remains one of the largest employers in the community.
“And just as important, they have a tremendous infrastructure and capital investment in our community in other ways that I think are important not to be overlooked,” he said, pointing to things such as the property taxes the company pays.
Salazar said Halliburton’s Grand Junction operations serve as a kind of logistical depot in an area where Halliburton doesn’t otherwise have a large presence, which makes it unlikely the company would close the local operations altogether.
The only scenario under which he could see that possibly happening is if its planned merger with competitor Baker Hughes is finalized, and if Halliburton determines Baker Hughes has a “logistically positioned asset at a more optimized location,” he said. Baker Hughes also has a presence in Grand Junction.