Weatherford International (NYSE: WFT) reported a loss of $345 million in 2013 along with a $778 million loss in 2012. Because of these continuing losses, the board is taking the appropriate steps to get the company back into the black. The changes that Weatherford will undertake are not small changes, but they are changes that must be carried out in order to get its financial future in good standing.

Divesting, cutting jobs, and saving millions
A few weeks ago, Weatherford announced that it sold its oil pipelines to Baker Hughes Incorporated (BHI) . Baker Hughes bought this pipeline for $250 million ($241 million in cash) because it will help the company integrate its value chain more effectively. Baker Hughes' primary business comes from drilling and constructing oil and natural gas wells but it also owns a few pipelines as well as some small downstream chemical services. The CEO of Weatherford, Bernard Duroc-Danner, believes this is the "first step toward Weatherford's refocus on its core businesses" which will enable it to become "a leaner, more efficient and stronger company."

The sale of this pipeline is a part of a broader decision for Weatherford to start divesting in its noncore businesses. It is Weatherford's hope to become more focused in its business offerings and increase profit margins over the short and long run. The pipeline business is only one of the four businesses that Weatherford plans to divest because these noncore businesses are bleeding the company's cash. The other noncore businesses include well testing services, the sale of drilling fluids, and the construction and rental of wellheads. These four businesses which Weatherford is planning to sell are estimated to have combined revenues of $1.3 billion in 2014. 

Along with divesting in noncore businesses, Weatherford is also planning to cut a large group of its workforce which will equate to nearly 7,000 jobs . Weatherford estimates that it will save $500 million annually because of this decision.

Moving to Ireland and retiring debt
In another attempt to cut costs, Weatherford is moving its location of incorporation from Switzerland to Ireland. CEO and President Bernard Duroc-Danner believes that this move will help Weatherford "operate at the lowest possible cost" and give the company the "ability to quickly and efficiently execute and move forward with [its] transformational path." This decision will be final once stockholders approve this decision at their annual meeting in June 2014.

In an attempt to free up future cash flow, Weatherford is attempting to pay down its long-term debt with some of the new revenue brought in by the divestitures. Over the course of 2013, Weatherford paid down $600 million worth of debt. Although this is a significant amount, Weatherford is still weighed down by its debt burden. Compared to a company like Halliburton who operates in similar markets with a debt ratio of around 50%, Weatherford has an abnormally high debt ratio at 62%.

Putting everything in perspective
Weatherford is undergoing a time of transition. As a company it is trying to narrow down its business offerings and become more focused on its core businesses. Divesting in noncore businesses should, in the long run, increase Weatherford's profit margins and earnings. Weatherford is also trying to pay down its high amount of debt with the extra cash from the divestitures. In the long run this should help free up Weatherford's cash flows and enable the company to invest more cash back into the business. Although its current financials don't look very pleasing, these changes give investors reason to be optimistic about the future of Weatherford.