Oil Layoffs Hit 100,000 and Counting
Roughnecks feel brunt of cuts as tumble in price of crude ripples through energy industry
Like many other oil-field workers, Chris Sabulsky spent years working a schedule known as “14 on, 14 off:” two weeks at an oil or gas well somewhere followed by another 14 days at home in East Texas, fishing for bass and crappie.
But now Mr. Sabulsky, 48 years old, is spending his days sending out résumés, calling acquaintances to see if they know of job openings, and pondering his future. His job managing hydraulic-fracturing, or fracking, operations at well sites evaporated in February after the oil-price plunge last year. Fracking, which uses water, chemicals and sand to free oil and gas from shale formations, has been a crucial factor in the U.S. energy boom.
“What we have to do is rebudget ourselves, re-educate ourselves, reinvent ourselves,” Mr. Sabulsky said by telephone from his home in Tyler, Texas.
Thousands of oil-field workers are in the same shoes or, more accurately, steel-toed boots. Since crude prices began tumbling last year, energy companies have announced plans to lay off more than 100,000 workers around the world. At least 91,000 layoffs have already materialized, with the majority coming in oil-field-services and drilling companies, according to research by Graves & Co., a Houston consulting firm.
Now the cutbacks are slowly showing up in federal employment data. Direct employment in oil and gas extraction, which had grown by more than 50,000 jobs since 2007, has fallen by about 3,000 jobs since it peaked in October at 201,500, according to the Bureau of Labor Statistics; 12,000 jobs have disappeared from the larger category of energy support since it reached 337,600 jobs in September.
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And the layoffs are continuing. Last week alone, the Texas Workforce Commission said it received notices of close to 400 layoffs from energy-related companies. Among them, FTS International, a privately owned oil-field-services business, said it was laying off 194 workers, while Lufkin Industries, a subsidiary of General Electric Co. that makes oil-field equipment, said it was cutting 149 workers, adding to the 426 workers it has cut since the year began.
While layoffs in the industry have hit office workers and high-skilled employees such as geologists and petroleum engineers, it is the roughnecks who are feeling the brunt of the cuts.
“The closer your job is to the actual oil well, the more in jeopardy you are of losing that job,” said Tim Cook, oil and gas recruiter and president of PathFinder Staffing in Houston. “Each time an oil rig gets shut down, all the jobs at the work site are gone. They disappear.”
The number of working U.S. oil and gas rigs has dropped 46% so far this year to 988, the lowest level in more than five years, according to data from Baker Hughes Inc., an oil-field-services company that is merging with industry giant Halliburton Co.
Oil-field jobs have been that rarity in the U.S. economy: highly paid positions that don’t require a college degree. They do require brawn and specialized skills, mostly learned on the job.
Alberto Hernandez, 27, became an oil-field worker three years ago, moved up the ladder and until recently was earning $72,000 a year as a derrick hand, handling drill pipe for a small company in West Texas.
“Everything was going good,” said Mr. Hernandez, who is from El Paso but has been working in Odessa. “I bought a Chevy Silverado with cash.” Laid off in January, he is looking for another energy-sector job but said he is considering joining the Army.
“Sure, these workers could find another job in construction or something similar,” said Dennis Cassidy, head of oil and gas consulting at AlixPartners’ Dallas office. But, he said, those jobs pay about half what an oil-field worker can get.
According to the Bureau of Labor Statistics, full-time “construction laborers” earned an average of $605 a week in 2014, while “derrick, rotary drill, and service operators, oil, gas and mining” earned almost twice as much, or $1,187 a week. The average pay at a well site is about $20 an hour, industry experts say, but overtime and hazard pay often put take-home salaries close to $100,000 a year.
Many industry veterans have lived through previous bust-after-the-boom cycles, and say they can ride out the downturn with rainy-day savings and part-time work. But a lot of laid-off workers were industry newcomers who in the past three years took jobs as floor hands, roustabouts and other field positions, meeting a rise in demand for workers as the shale boom helped U.S. oil production almost double between 2008 and 2014.
‘The closer your job is to the actual oil well, the more in jeopardy you are of losing that job’
—Tim Cook, oil and gas recruiter and president of PathFinder Staffing
“Due to this growth in shale, there’s a higher population coming from nonoil backgrounds,” including grocery-store managers and police officers, said Emily Yang with the North Highland Co. consulting firm in Houston.
Some say they are unlikely to return to the energy business even if it rebounds. One is Claire Cutshaw, 45, who had a series of mostly computer-related jobs before she went back to college and earned a degree in geology in 2013. She then took work as a “mud logger,” monitoring gas levels and analyzing rock samples during drilling. She earned more than $40,000 a year.
She worked steadily throughout 2014, she said, but in January, “the calls just stopped coming.” A couple weeks ago, she rented a U-Haul truck, packed up her belongings in Odessa, Texas, and moved back to Waynesville, N.C.
Mr. Sabulsky, who has worked in the oil fields since he graduated from high school more than 30 years ago, said he misses the camaraderie of the oil fields. On call for two weeks at a time, “We often would end the day by getting together and frying up grouper or barbecuing steaks,” he recalled.
He recently found work in the Marcellus Shale in Pennsylvania, but the job lasted only a couple of weeks, he said. “The outlook isn’t good.”
source: Oil Layoffs Hit 100,000 and Counting | NEWS ABOUT USA AND CANADANEWS ABOUT USA AND CANADA
Roughnecks feel brunt of cuts as tumble in price of crude ripples through energy industry
Like many other oil-field workers, Chris Sabulsky spent years working a schedule known as “14 on, 14 off:” two weeks at an oil or gas well somewhere followed by another 14 days at home in East Texas, fishing for bass and crappie.
But now Mr. Sabulsky, 48 years old, is spending his days sending out résumés, calling acquaintances to see if they know of job openings, and pondering his future. His job managing hydraulic-fracturing, or fracking, operations at well sites evaporated in February after the oil-price plunge last year. Fracking, which uses water, chemicals and sand to free oil and gas from shale formations, has been a crucial factor in the U.S. energy boom.
“What we have to do is rebudget ourselves, re-educate ourselves, reinvent ourselves,” Mr. Sabulsky said by telephone from his home in Tyler, Texas.
Thousands of oil-field workers are in the same shoes or, more accurately, steel-toed boots. Since crude prices began tumbling last year, energy companies have announced plans to lay off more than 100,000 workers around the world. At least 91,000 layoffs have already materialized, with the majority coming in oil-field-services and drilling companies, according to research by Graves & Co., a Houston consulting firm.
Now the cutbacks are slowly showing up in federal employment data. Direct employment in oil and gas extraction, which had grown by more than 50,000 jobs since 2007, has fallen by about 3,000 jobs since it peaked in October at 201,500, according to the Bureau of Labor Statistics; 12,000 jobs have disappeared from the larger category of energy support since it reached 337,600 jobs in September.
Advertisement
And the layoffs are continuing. Last week alone, the Texas Workforce Commission said it received notices of close to 400 layoffs from energy-related companies. Among them, FTS International, a privately owned oil-field-services business, said it was laying off 194 workers, while Lufkin Industries, a subsidiary of General Electric Co. that makes oil-field equipment, said it was cutting 149 workers, adding to the 426 workers it has cut since the year began.
While layoffs in the industry have hit office workers and high-skilled employees such as geologists and petroleum engineers, it is the roughnecks who are feeling the brunt of the cuts.
“The closer your job is to the actual oil well, the more in jeopardy you are of losing that job,” said Tim Cook, oil and gas recruiter and president of PathFinder Staffing in Houston. “Each time an oil rig gets shut down, all the jobs at the work site are gone. They disappear.”
The number of working U.S. oil and gas rigs has dropped 46% so far this year to 988, the lowest level in more than five years, according to data from Baker Hughes Inc., an oil-field-services company that is merging with industry giant Halliburton Co.
Oil-field jobs have been that rarity in the U.S. economy: highly paid positions that don’t require a college degree. They do require brawn and specialized skills, mostly learned on the job.
Alberto Hernandez, 27, became an oil-field worker three years ago, moved up the ladder and until recently was earning $72,000 a year as a derrick hand, handling drill pipe for a small company in West Texas.
“Everything was going good,” said Mr. Hernandez, who is from El Paso but has been working in Odessa. “I bought a Chevy Silverado with cash.” Laid off in January, he is looking for another energy-sector job but said he is considering joining the Army.
“Sure, these workers could find another job in construction or something similar,” said Dennis Cassidy, head of oil and gas consulting at AlixPartners’ Dallas office. But, he said, those jobs pay about half what an oil-field worker can get.
According to the Bureau of Labor Statistics, full-time “construction laborers” earned an average of $605 a week in 2014, while “derrick, rotary drill, and service operators, oil, gas and mining” earned almost twice as much, or $1,187 a week. The average pay at a well site is about $20 an hour, industry experts say, but overtime and hazard pay often put take-home salaries close to $100,000 a year.
Many industry veterans have lived through previous bust-after-the-boom cycles, and say they can ride out the downturn with rainy-day savings and part-time work. But a lot of laid-off workers were industry newcomers who in the past three years took jobs as floor hands, roustabouts and other field positions, meeting a rise in demand for workers as the shale boom helped U.S. oil production almost double between 2008 and 2014.
‘The closer your job is to the actual oil well, the more in jeopardy you are of losing that job’
—Tim Cook, oil and gas recruiter and president of PathFinder Staffing
“Due to this growth in shale, there’s a higher population coming from nonoil backgrounds,” including grocery-store managers and police officers, said Emily Yang with the North Highland Co. consulting firm in Houston.
Some say they are unlikely to return to the energy business even if it rebounds. One is Claire Cutshaw, 45, who had a series of mostly computer-related jobs before she went back to college and earned a degree in geology in 2013. She then took work as a “mud logger,” monitoring gas levels and analyzing rock samples during drilling. She earned more than $40,000 a year.
She worked steadily throughout 2014, she said, but in January, “the calls just stopped coming.” A couple weeks ago, she rented a U-Haul truck, packed up her belongings in Odessa, Texas, and moved back to Waynesville, N.C.
Mr. Sabulsky, who has worked in the oil fields since he graduated from high school more than 30 years ago, said he misses the camaraderie of the oil fields. On call for two weeks at a time, “We often would end the day by getting together and frying up grouper or barbecuing steaks,” he recalled.
He recently found work in the Marcellus Shale in Pennsylvania, but the job lasted only a couple of weeks, he said. “The outlook isn’t good.”
source: Oil Layoffs Hit 100,000 and Counting | NEWS ABOUT USA AND CANADANEWS ABOUT USA AND CANADA
