Coronavirus impact: Oil industry cuts 51,000 jobs globally in March; more layoffs to follow

The size of the workforce in the world's oil and gas industries, buffeted by collapse in global demand due to coronavirus lockdown coupled with an oil-price war between Russia and Saudi Arabia that led to supply glut, has slumped dramatically in last one month. The beleaguered oil and gas industry shed around 51,000 drilling and refining jobs in March, and the situation is likely to get worse in April as oil futures prices plunged to historic low, according to a Bloomberg report.

According to research consultancy firm BW Research Partnership, job losses in March jump by 15,000 when ancillary jobs such as construction, manufacturing of drilling equipment and shipping are included in the list. The firm calculated the data by analysing figure released by the US Department of Labour combined with its own survey data of about 30,000 energy companies.

"We're looking at anywhere between five and seven years of job growth wiped out in a month," Philip Jordan, the company's vice president told Bloomberg. "What makes it sort of scary is this really is just the beginning. April is not looking good for oil and gas," Jordan added.

Oil and gas companies are expected to let go of around 30 per cent of its employees in the first quarter of 2020, according to an estimate by BW Research.

US oil futures slipped below zero for the first time on Monday as demand for energy collapsed in wake of coronavirus pandemic which has frozen economic activity globally. The contract for West Texas intermediate crude (WTI), the benchmark for US crude prices, slumped below $0 per barrel level on April 20. The May crude futures witnessed sharp sell-off ahead of Tuesday's expiration and closed Monday's trade at minus $37.63 a barrel, down 306 per cent.

Company wise, US-based Halliburton, one of the world's largest oil field service companies, laid off 3,500 workers at its headquarters in Houston last month, while oil-field services firm Canary Drilling Services fired 200 staff and implemented across-the-board salary cuts. Among others, Oklahoma-based Recoil Oilfield Services LLC laid off 50 workers after losing its contract with shale giant EOG Resources Inc.

Oilfield service companies, that provides hefty amount of the jobs in oil and gas sector, are worst hit by the crisis, as such companies are weaker than the oil companies and are likely to start disappearing quickly, Bloomberg quoted Dan Eberhart, the chief executive Canary Drilling Services, as saying.

BW Research, in its previous report released last week, claimed that clean energy workers, such as solar panel installers and electric vehicle manufactures, lost more than 106,000 jobs in March. Overall, energy-related job lost stood at 303,000 last month, the firm reportedly said.

By Chitranjan Kumar

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