GRAND JUNCTION, Colo. As the price of oil continues to decline, the number two oilfield services operator in North America, Halliburton, is sending out another round of layoff notices.
An employee told KKCO Thursday that they were called in and told that Halliburton will be laying off over one hundred employees by next week in the Grand Junction office.
Halliburton announced Thursday that it's already reduced its global headcount by nearly 16,000 employees from 2014.
The CEO of an Austin-based energy consulting firm, Atlas Consulting, obtained on Monday an internal memo sent throughout Halliburton confirming these layoffs.
Part of the memo reads:
"As I know you are certainly aware, these continue to be tough times for our industry. Oil prices are under pressure, rig counts continue to decline and customer spending has been significantly curtailed both for the remainder of 2015 and 2016. As a result, we must continue to manage through this extended industry down cycle by implementing additional cost reduction measures to protect the interests of all stakeholders.
Unfortunately, this means that additional staff reductions are underway, with the majority of the reductions in North America, the region hit hardest by market conditions."
CEO of Atlas Consutling Dallas Salazar says a trusted inside source estimates that the layoffs will total 20,000.
With Halliburton employing over 1,900 Colorado employees, he predicts Grand Junction to get a major hit.
The question is - will the Grand Junction office be at risk of shutting down?
"What Halliburton wants to avoid is any structural integrity damage," said Salazar. "That location is actually key for them logistically. They don't have a lot of Rocky Mountain presence from an office standpoint, so they wouldn't consider shutting it down, but the headcount there I do see will be significantly reduced."
Halliburton could not be reached for comment as of Thursday night.
Worldwide, nearly 179,000 workers have lost their jobs in the downturn, according to data collected by energy recruiter Swift Worldwide Resources.
With the price of crude oil now around 45 dollars per barrel, Salazar says it's dropping to historic lows, and doesn't look like it's turning around anytime soon.
"This can go on another at worst two or three years, because it's primarily being driven by increased Saudi Arabian output," said Salazar. "This is approaching the longest - this is already the second longest oil crisis ever.The odds of it coming back before the second part of 2016 are slim to none."
Halliburton is in the process of acquiring Baker Hughes, the world's third largest energy provider which was announced in a 35 billion deal last year.
If they close on that transaction, Salazar says the Grand Junction office could be in more trouble.
"Baker Hughes might have assets better geographically positioned or at a lower cost structure so that Halliburton will be better to optimize their model by closing out the Grand Junction office," said Salazar.
To read the rest of the internal memo obtained by Salazar, head to the link on the right.