Collapsing oil prices continue to shake the foundations of Louisiana’s economy. As Bloomberg reports, companies that help find and produce oil are suffering as the price-per-barrel hovers just above six-year lows, leading to a slew of recent layoff announcements in the industry.
Halliburton Co., the world’s second-largest oilfield services provider, announced this week it’s cutting as much as 8% of its global workforce of more than 80,000. Service company Schlumberger, meanwhile, said last month it will drop 9,000 jobs, while Baker Hughes Inc. plans to cut 7,000 positions. The reductions include positions in the Houma and Lafayette areas.
Throughout Louisiana, where proceeds from oil and gas extraction account for 13% of revenue, the shock waves from the seven-month plunge in crude prices are hitting home. A 28% decline since the start of December threatens to extend an eight-month streak of increases in Louisiana’s jobless rate, the longest since the recession.
“Oil is huge. It touches everything,” Norby Chabert, a 39-year-old Republican state senator, recently told Bloomberg while reclining on a couch in Bar Roussell, a lounge he owns in Houma. “Everyone in the oil industry knows the price of oil is going to rise and fall. The question is the duration.”
Louisiana’s jobless rate jumped to 6.7% in December, up from 5.4% a year earlier, Labor Department data show. North Dakota, a center of the shale-oil boom, was the only other state where the rate rose, but at 2.8% it’s still the nation’s lowest. The U.S. figure of 5.6% that month was the lowest since June 2008.
Nationwide, energy companies are reducing workers. The industry made up 38% of 53,041 job losses in January among U.S.-based employers, according to a report from outplacement firm Challenger, Gray & Christmas. While Texas led the reductions, it’s just as tough in Louisiana, says Toby Toups, a recruiter for oil and exploration jobs at Personnel Consulting Group in Metairie.
“Six months ago, everyone wanted to get into oil and gas, because when it’s good, it’s really good, and it pays more than anything,” Toups says. “But when it’s bad, it’s really bad.”
