FMC Technologies plans further layoffs

HOUSTON — FMC Technologies executives say its joint venture with another subsea oil-equipment maker has been welcomed by operators but it will still have to continue to cut its workforce in coming quarters as activity stagnates.

The Houston oil field service company has already cut about 15 percent of the employees in its land services unit but didn’t say how much more of its workforce it planned to cut.

In the North American land market, “it’s unlikely we’ll see much recovery before 2016,” said FMC Technologies CEO John Gremp in a conference call with investors on Wednesday.

Over the next few quarters, FMC Chief Financial Officer Maryann Seaman said, the company’s headcount reductions “will be more reflective of the anticipate decrease in future-year activity due to delayed subsea project inbound.” She expects FMC will take $15 million to $20 million in further restructuring charges in the second half of the year.

The company said in February it would cut its workforce by 2,000 employees. Those payroll cuts were mostly related to the on-land surface business and related to North America, but the company has largely finished that rounds of cuts because the size of the North American land business is now more in line with lower activity levels in the region, FMC spokesman Patrick Kimball said.

Kimball said the future layoffs are expected to affect the company’s subsea business once it has worked through much of its current backlog of equipment orders.

FMC executives said its joint venture with fellow subsea oil-equipment maker Technip, called Forsys Subsea, has been well received by nationalized oil companies, international oil companies and independent oil producers and is in talks with those firms about projects on fields around the world.

The joint venture is an effort to cut costs for oil companies by combining FMC and Technip construction processes early in the design of offshore projects, changing the way the industry builds and installs the architecture of its subsea equipment.

In meetings with oil companies,” we’ll often go in prepared to talk about a particular project and before the meeting is over, we’ve had on more than one occasion a customer introduce to us a portfolio of projects,” said Douglas Pferdehirt, FMC’s president and chief operating officer.

“These are projects that have been on the cusp or the project economics have been just outside of the threshold to move those forward,” he said. “And they’re now introducing that portfolio and saying look if this can work, we have multiple projects we’d like to conduct under this manner.”

On Tuesday after the market closed, FMC reported that profit fell 52 percent in the second quarter as its land-based oil equipment business continued to get hammered in North America by lower oil prices.

SHOW MORE