Halliburton Lays Off 6,000 Amid Merger Woes

     HOUSTON (CN) — Determined to regain its lost income from the oil-market crash, Halliburton is firing workers and fighting the federal government for approval of a merger that would create the world’s largest oil-service company.
     The company said Friday it laid off 6,000 workers in the first three months of 2016.
     Halliburton has now slashed 33,000 jobs since the price of crude oil tanked starting in late 2014, dropping from above $100 per barrel to below $30 this past January, company officials said in a statement announcing the latest layoffs.
     Brent Crude, the international benchmark, is now trading at $44.80 per barrel, Bloomberg reported.
     Despite the job cuts, Halliburton still has more than 55,000 workers in 70 countries.
     The upstream oil-service company measures its financial health by the number of rigs in the field.
     “Upstream” is an industry term for drillers whose oil and gas is moved by “midstream” pipeline operators to “downstream” refiners.
     The U.S. rig count is 431 as of Friday, down from 932 in April 2015, according to Baker Hughes.
     Halliburton and Baker Hughes are the second- and third-largest oil-service companies in the world, and a merger they announced in November 2014 would form a company bigger than industry leader Schlumberger. All three companies are based in Houston.
     But the Justice Department, concerned about the market power the new company would wield, sued to block the deal on April 6 in Delaware Federal Court.
     “The proposed deal between Halliburton and Baker Hughes would eliminate vital competition, skew energy markets and harm American consumers,” Attorney General Loretta Lynch said in a statement.
     Halliburton had planned to announce its quarterly earnings Monday, but delayed the earnings call until May 3 because of the feds’ antitrust lawsuit.
     The company and Baker Hughes are now backing into a self-imposed deadline for the merger.
     “Halliburton and Baker Hughes agreed to extend the time period under the merger agreement to obtain regulatory approvals to no later than April 30, 2016, after which the parties may continue to seek relevant regulatory approvals or either of the parties may terminate the merger agreement,” Halliburton said in a statement.
     Halliburton will fight tooth and nail to win approval before U.S. District Judge Gregory M. Sleet in Delaware because if the deal falls through it owes Baker Hughes a $3.5 million breakup fee.
     To sooth the federal government’s antitrust concerns, Halliburton agreed to divest some of its drilling businesses, but the feds found the offer lacking.
     “Halliburton wants the United States to agree to the most complicated array of piecemeal divestitures and entanglements that I have ever seen,” Assistant U.S. Attorney General Bill Baer said.

%d bloggers like this: