Falling oil prices have been behind numerous layoffs to industry workers, but these job cuts have been showing signs of slowing down. According to a recent report from Challenger, Gray & Christmas, the worst part of the oil industry’s decline may be over as fewer workforce decreases are being reported.
The report explained that during the first quarter of 2015, over 68,000 oil industry jobs were cut, creating an average monthly decline of 17,000 jobs for the sector. The source noted that in April alone, over 20,000 positions were cut from oil-related organizations. This rate fell sharply in May however, when only 1,000 jobs were eliminated as a result of falling oil prices. The financial activities industry actually experienced far more cuts to its workforce than the oil sector, losing 5,539 workers and anticipating a minimum of 5,000 planned cuts over the next 18 months.
Still, the oil industry remains in the midst of planned downsizing initiatives meant to keep organizations afloat despite low prices. The Houston Business Journal reported that these cuts are especially prominent in Texas, a state whose economy is largely dependent on the oil industry.
So far this year, the Lone Star State has lost over 73,000 positions, and a number of big-name companies have announced plans to eliminate even more jobs in the near future. Schlumberger Ltd. will be shrinking its workforce by 15 percent, or 20,000 positions, while Baker Hughes Inc. will be cutting 10,500 jobs, which accounts for 17 percent of its overall workforce.
Despite these plans for downsizing, the report indicated that things will likely improve fairly soon.
“Unless, there is another severe drop in the price of oil, we probably will not see another surge in oil-related job cuts this year,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, in a release.