FMC Technologies Inc. (FTI, Financial), headquartered in northern Houston, Texas, is an American company that provides technologies and services to the oil and gas industry globally.
The company started in August 1927, when brothers Arthur and Kirby Pennick of Houston founded Oil Center Tool (O-C-T) to produce rods and pump liners for the oilfields of East Texas. The company launched an innovative type of casing head and tubing head in 1930 and shortly after that introduced the first factory-assembled and tested completion wellheads.
FMC Technologies operates 30 production facilities in 16 countries and has around 20, 000 employees. The company devises, constructs and services systems and goods like surface wellhead systems, measurement solutions and marine loading systems, subsea production and processing systems, high pressure pumps and fluid control equipments, for the energy industry. It also expertises in subsea technologies that helps in the utmost extraction of hydrocarbons from complex reservoirs.
FMC reduces 10% workforce
Due to falling oil prices FMC Technologies is laying off employees from its current head count of approximately 20,000 employees. The company has started the downsizing process by handing over pink slips to approximately 2,000 employees in an attempt to reduce costs as the oilfield services industry is facing a difficult year after the downslide of crude oil prices.
Most of FMC’s 10% job cut will be from its operations in North America and will affect the company's operations most considerably in the U.S. region. The major impact of the job cuts will be on surface and fluid control dealings, which are majorly situated outside Houston.
News of the company’s drastic layoff comes after big headcount cuts by the world’s four biggest oil field service companies: Baker Hughes (BHI, Financial), Halliburton (HAL, Financial), Schlumberger (SLB, Financial) and Weatherford International (WFT, Financial). These layoffs are a result of the fall in oil prices to around $50 a barrel from $100 a barrel in the summer of 2014.
According to reports, FMC’s profits fell by 5% in the fourth quarter as it incurred a $24.9 million charge in relation to its U.S. benefit pension plans and suffered a $25.5 million foreign currency loss.
The company made a profit of $168.6 million, or 72 cents a share, in the October-December time in 2014 as compared to $177.8 million, or 75 cents a share, in the same period in 2013. FMC’s income increased to $2.16 billion from $2.05 billion. There was a total of $6.6 billion from the company’s backlog of equipment orders.
Scenario after the layoff
According to FMC CEO John Gremp, the company is quickly and effectively responding to the slowdown in its North American business by lessening discretionary and capital expenditures. The oil service industry is experiencing a difficult year due to the slump in oil prices, and the downturn is expected to continue over the approaching months.
In 2015 the subsea orders are expected to shrink from $5.8 billion in 2014, as most oil companies are reducing their capital expenditure. But FMC Technologies is expecting to develop on reductions of its cost structure that started in 2014, to make subsea equipment more competent.
FMC is hoping that the layoff will address the issue of lesser volumes that is expected to happen in 2015 and will enable the company to allow effective management during the downturn.
