The real reason for layoffs is to pass corporate risk from the shareholders to employees. If the shareholders risk increase they respond by lowering the price they will pay for stock which directly impacts the CEOs bottom line because most of his pay comes from stock options. If the risk is transferred to the bond holder then he demands higher interest rates lowering corporate profits which lower stock prices which reduces the value of the CEOs options. But if they pass the risk to the employee in the form of layoffs the employee can do nothing that has any direct impact on corporation. In fact stock prices will either go up or not drop as much because stock analysis do realize that labor is less than 10% of operating cost in an integrated oil company and have no idea of the importance of experience and knowledge in the oil industry in keeping operating and capital cost under control. The CEO only has to be no worse than the others and is at the end of his career so he is usually cashed out when the cost of layoffs hit home a few years down the road.
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yes agree - great post - The newly merged Baker Hughes reported a $104 million net loss and revenues of nearly $5.4 billion in its first quarter as a bigger industry player under the General Electric umbrella.
Great post. This is exactly what GE is doing. But most employees will just sit on their hands until they get let go. Everybody should be looking you never know when that dream job could come along. Plus if you get an offer its good to still have a job in case not what you wanted.
If you are a fresh graduate DON'T even think to look for jobs in oil and gas industry run away from oil and gas and don't look back. If you are in your 30+ and still working in oil and gas, better diversify your skills or have a plan to start your own business.