Energy services provider Halliburton is laying off 178 workers in a major reduction in force at its Grand Junction office, but plans to retain some local presence.
The company told the state Department of Labor and Employment in a written notice of the mass layoffs at its office at 3199 D Road. The notice was dated Monday and Halliburton said it anticipated making the layoffs that same day. The state received the notice Tuesday, according to a receipt-date stamp on the letter.
"The layoff is expected to be a permanent employment loss," the company said in the letter. "At this time it is expected that the facility will remain open."
The letter said it serves as a written notice to the city of Grand Junction of the layoffs. It was sent to the state as required by the federal Worker Readjustment and Retraining Notification (WARN) Act, which is intended to protect workers, their families and communities from the impact of mass layoffs. The act requires a 60-day notice prior to layoffs, although some exceptions apply.
Company spokesperson Emily Mir said in an email Tuesday that the company "made reductions to its employee workforce in Grand Junction due to local market conditions. Making this decision was not easy, nor taken lightly, but unfortunately it was necessary as we work to align our operations to reduced customer activity."
She said that across Halliburton's Rockies region, which includes Colorado, Wyoming, New Mexico and North Dakota, about 650 employees were affected.
"The Company offered the majority of those employees the option to relocate to other Halliburton operating areas where more activity is anticipated," she said.
Halliburton's letter to the state of Colorado identified laid-off employees by job title and number of laid-off people in that job. Many job titles directly referenced hydraulic fracturing and well-cementing positions, but truck drivers, mechanic and electronic technicians and a variety of other workers were affected as well. Supervisors and safety personnel also were among those laid off.
Mir said Halliburton's Multi-Chem business "will continue to office" at the company's Grand Junction location. The company's website says that business provides technical expertise and service pertaining to customized specialty oilfield chemicals for wells.
Halliburton also made local layoffs this spring.
In July, the Houston Chronicle reported that Halliburton cut 8% of its North American workforce as it took fleets of hydraulic fracturing equipment out of the field due to a continued slump in demand for frack services due to low oil prices.
Locally, drilling activity is focused on natural gas, and natural gas prices have been low for years. Only three rigs are being operated in western Colorado's Piceance Basin. Two are drilling for Caerus Oil and Gas, and the third for Terra Energy Partners.
Caerus cut nearly 10% of its Parachute and Denver work forces in the spring in a restructuring.
As of August, Caerus was contracting with Calfrac Well Services' Grand Junction operation for hydraulic fracturing of its wells.
Companies with local natural gas assets are worried about not just prices but uncertainty over Senate Bill 181, the oil and gas bill passed this year that overhauls how the industry is regulated in Colorado and has resulted in a flurry of new rulemaking processes.
The regulatory shakeup also has slowed the permitting process and resulted in uncertainty regarding if, or how, state rules will apply on federal land after December.
A current agreement between the state and Bureau of Land Management that coordinates federal and state regulations will expire then unless it's extended.
Laramie Energy, a leading gas producer in western Colorado's Piceance Basin, has said that low gas prices and regulatory uncertainty are behind its decision to stop drilling for now.
Eric Carlson, executive director of the West Slope Colorado Oil and Gas Association industry group, said there aren't many indications drilling activity will pick up any time soon. He said few are willing to invest in the area given the price and regulatory concerns, and layoffs are hitting both energy developers and their contractors.
"You see companies pulling out, Halliburton pulling out, because the business opportunity's not here," Carlson said.
Carlson said a lot of contractors based locally are working in other states where there is more drilling activity, with workers driving long distances and staying in hotels to do so.