Baker Hughes Cuts 17% of Staff, Closes Facilities

Baker Hughes Inc. on Tuesday said it has cut 17% of its workforce, and the oil-field services company closed or consolidated 140 facilities during the first quarter amid falling oil prices.

The company also reported first-quarter results that came in sharply below Wall Street expectations.

Baker Hughes, which had previously estimated job cuts at 7,000, said it has now slashed 10,500 positions.

The moves, expect to reduce costs by $700 million a year, come as tumbling oil prices are prompting customers to curtail or cancel projects. Chief Executive Martin Craighead said he expects the tough market conditions to continue.

For the quarter ended March 31, Baker Hughes reported a loss of $589 million, or $1.35 a share, compared with a prior-year profit of $328 million, or 74 cents a share. Excluding restructuring and severance charges, among other items, the company's adjusted per-share loss was seven cents.

Revenue fell 20% to $4.6 billion.

Analysts polled by Thomson Reuters were expecting adjusted earnings of 46 cents a share on revenue of $5.35 billion.

"Our first quarter results are a reflection of the extreme market forces faced by our industry since late December," Mr. Craighead said.

Earlier this month, Baker Hughes said it suspended the quarterly publication of the U.S. onshore well count as it seeks to cut costs and continue publishing its closely watched weekly rig count reports.

Meanwhile, Baker Hughes is moving forward with its deal to be bought by larger rival Halliburton Co. The deal, struck in November and valued at almost $35 billion at the time, underscored the new realities for energy companies in a world suddenly awash with oil. As a result, oil-field services companies, which are hired to drill and pump wells, are facing less demand for their services and pressure to cut prices.

Industry experts have predicted that firms like Baker Hughes and Halliburton will have to shrink further as clients demand price cuts.

Write to Chelsey Dulaney at [e-mail]

Access Investor Kit for Baker Hughes, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US0572241075

Access Investor Kit for Halliburton Co.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US4062161017

Subscribe to WSJ: http://online.wsj.com?mod=djnwires