Halliburton has laid off 350 workers in Oklahoma as the squeeze of oil prices on the industry forces companies to shrink their operations. The Houston Chronicle?reported?the layoffs citing a filing with the state employment watchdog, and Halliburton later confirmed it.

"This was a difficult decision, but is a necessary action as we work to successfully adapt to challenging market conditions," Halliburton said in a statement. "As we make workforce reductions, we are taking numerous other actions to reduce our costs, including reducing the salaries of the Halliburton Executive Committee."

The oil industry is feeling the cost-reduction drive across the entire sector as oil trades lower than breakeven prices. And even though many producers in the U.S. oil patch have hedged their output for this year at higher rates, they are seeking to minimize the impact of the oil price crash on their operations. Rystad Energy?reported?earlier this year that 30 companies accounting for 38 percent of total U.S. production this year had hedged their output at an average price floor of $56 a barrel.?

But they are cutting costs.

As in the last crisis, oilfield service providers will likely be harder hit than exploration and production players. Already at least two companies have?asked?for deep discounts on these services, of about 25 percent, to weather the crisis. At the same time, they are cutting spending, meaning that production growth is about to slow down soon, and so is hiring.

The last industry downturn caused by low prices?cost?the U.S. oil industry?including oilfield services?as many as 200,000 jobs. That was about a third of the total workforce employed in the sector. Now, the U.S. oil industry could be looking at a rerun--potentially a worse one--because unlike last time, this time the excessive production of oil is adding to a slump in demand caused by the spread of Covid-19 that has put most of Asia, Europe, and North America on lockdown.

By Irina Slav for Oilprice.com

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