On Tuesday morning, Baker Hughes Incorporated (NYSE:BHI) reported that it had trimmed its labor force by 17% within the first quarter of the 2015 financial year as it closed over 140 facilities.
The company’s performance in the first quarter was lower than the projections of Wall Street. So far, the company has trimmed 10500 job positions contrary to the projected 7000 job cuts. The company made the decision to throw toss out these job positions in a bid to cut down on its expenses. The company aims to save over $700 million in costs following its cuts.
Baker Hughes lost most of its clients who mainly pulled out of their deals due to decreased oil prices. The company’s executive, Martin Craighead reported that the firm expects the hard times to continue.
Baker Hughes reported losses amounting to $589 million within the first quarter as of March 31. The loss translated into a decrease in the share value to $1.35 per share. Profits within the previous year had amounted to $328 million with a share increment of $70 cents to the share value at the time.
Craighead attributed the poor performance to the extreme conditions that the industry has been going through since late last year. The company recently reported that it would indefinitely suspend its publications citing that it is affecting the market performance. Investors and customers usually have a close eye on company dealings and performance. They usually respond to these factors and the negative reports have been more denting.
Specialists speculate that companies like Baker Hughes will have to incorporate more cuts to their expenditure if they want to keep up with the customers’ demand for lowered prices. In the meantime, the company plans on pushing forward with a contract for a buy off by one of its rivals. Halliburton Company (NYSE:HAL) is the company that will buy off Baker Hughes. The buy off deal that was initiated in November 2014 was valued at $35 billion. Recent industry changes will probably lead to a few tweaks in the contract.