Please ensure Javascript is enabled for purposes of website accessibility

Schlumberger to Restructure Operations and Executive Team, Says Report

By Howard Smith - May 21, 2020 at 11:36AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The oil services giant is planning more changes to deal with sharply lower oil prices and drilling activity as demand fell from COVID-19 pandemic impacts.

Schlumberger (SLB -2.14%), a leading provider of technology and services to the oil and gas industry, has plans to restructure its business operations, and rearrange executive duties, according to a Reuters report. The moves come after CEO Olivier Le Peuch took over the position on August 1, 2019, and amid a sharp decline in oil prices and demand for its services amid the COVID-19 pandemic. 

As oil prices dropped sharply, oil producers around the globe reacted by cutting production. The latest rig count from Baker Hughes Co. (BKR -1.46%) shows year-over-year reductions of 66% in the U.S., 63% in Canada, and 14% internationally. 

oil field service worker in front of rig

Image source: Getty Images.

In dealing with the industry slowdown, Schlumberger has already announced cost control measures including cutting jobs and furloughing some personnel, closing facilities, and cutting salaries. The Board of Directors and executive officers have also taken compensation cuts. At its first-quarter earnings call on April 17, 2020, the company also said it would cut its capital spending plan by 30% and research and development spending by 20% in the second-quarter.

The new restructuring will consolidate the company's 17 product lines into four divisions based on customer "workflow," according to the report. A company memo explains that Schlumberger "also will create five "basins" groups over 30 geographic units, replacing what it had called GeoMarkets and sub-GeoMarkets teams." 

The memo also reportedly said CEO Le Peuch has picked two executives to head business and regional operations groups, which will be in place by July 1. The current executive vice president (EVP) of Reservoir and Infrastructure will become EVP of Services and Equipment over the four new business divisions, and current EVP of Operations will become EVP of Geographies, leading the regional operations group, including sales and commercial areas.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Schlumberger Limited Stock Quote
Schlumberger Limited
$36.18 (-2.14%) $0.79
Baker Hughes, a GE company Stock Quote
Baker Hughes, a GE company
$29.63 (-1.46%) $0.44

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.