Read Email Sent From Halliburton CEO To Employees About Jobs And 2015
We have obtained a copy of the email sent by CEO Dave Lesar to every Halliburton employee this week from regulatory filings. The email outlines some of the strategic reasons for the Baker Hughes deal. It also honestly addresses the challenging outlook for 2015, hinting at additional headcount reductions ahead (Halliburton recently laid off 1,000 eastern hemisphere workers in response to tough market conditions).
Lesar writes: "Right now it looks like 2015 is going to be a tough year. We will have to make reductions to our structure as any prudent business would. But I want to be clear — these reductions are related to market conditions, not the acquisition."
He also wrote that the combined Baker Hughes / Halliburton entity will have over 120,000 employees. This could be the first hint of what the headcount reductions during the integration might look like as the two companies employ approximately 140,000 people now. The back of the napkin math suggests a 15% workforce reduction, 20,000 jobs. This should not come as a huge surprise as the transaction calls for $2bn in annual cost savings.
Read The Full Email Below
TO: All Halliburton Employees
FROM: Dave Lesar, chairman and CEO
SUBJECT: Halliburton 2015: Continued growth through innovation, execution and dedication
As we look ahead to 2015, I want our shared vision of Halliburton’s future to be strong and clear. With the pending acquisition of Baker Hughes, Halliburton will be established as a bellwether global oilfield services company. Like Halliburton, Baker Hughes has a long history of delivering superior products, innovative technology and outstanding service to help its customers achieve their goals. And, like Halliburton, Baker Hughes employees are committed to the core values of integrity, teamwork, performance, learning and courage. These similarities made me want to bring us together, and they will help the combined company thrive.
The new, more diversified organization will have additional scale and resources to give all employees outstanding opportunities for professional growth through our well tested and mature training programs, clearly defined individual career paths and a world of development possibilities either within your current area or across the organization.
Halliburton will continue to be led by me and a mature, stable and highly capable management team with a proven scalable organizational structure. We intend to follow the same business model that successfully brought Halliburton to the point where we can acquire an outstanding company like Baker Hughes to become an even more dynamic, customer-focused company. Our strategies have served us well and I have no intention of changing them. Our focus on leading in unconventional resource development, outperforming in the deep water complex and rapidly growing our mature field business has worked very well and will continue. Many of our business lines will be significantly strengthened with the addition of the Baker Hughes people, technology and customer relationships. This acquisition will help us grow our revenues, expand our footprint, add high quality resources, spend more on select technologies and compete more effectively in underserved markets around the globe. This is not an acquisition to become more profitable through cutting costs, although we will need to eliminate duplications and achieve synergies to be an effective customer-focused organization. This acquisition will allow us an even bigger platform that will benefit both sets of employees. Just think for a moment about the career opportunities available in an organization with over 120,000 employees, including the more than 1000 ex-Baker Hughes employees in our Halliburton family now.
While I look forward with great excitement to achieving the benefits of the acquisition we will not be immune to market conditions and right now it looks like 2015 is going to be a tough year. We have been through these before and know how to navigate them while maintaining our focus on the future. We will have to make reductions to our structure as any prudent business would. But I want to be clear — these reductions are related to market conditions, not the acquisition. It’s important to remember that distinction as we go forward.
Finally, the post-transaction Halliburton will succeed, as it always has, by executing on our external market strategies and processes. Innovation, collaboration, continuous improvement, relentless dedication to integrity, safety and service quality – these practices define our culture, now and for the next year, decade and century.
I know you have questions about the road ahead. The integration team and I will give you as much information as promptly as possible. We remain committed to providing you with the most open and transparent communication.
The acquisition is expected to close in the second half of 2015, and until closing the two companies must continue to operate independently. In the meantime, stay focused. YOU make Halliburton the success that it is today, not me or the management team. YOU are the key to our future. YOU are Halliburton. Work as you always have, stay safe, and deliver to our customers the reliable, effective service they have every reason to expect from the people who wear Halliburton red.
As we move toward this momentous juncture, I thank you for your hard work and dedication, and I am eager to see all that our combined company will accomplish in the coming years.