FMC Technologies cuts 1,000 jobs, more on the way

Oilfield equipment maker FMC Technologies warned that more job cuts are on the way through the end of the year after eliminating another 1,000 jobs in the third quarter.

Houston-based FMC, which focuses primarily on offshore energy services, said it is cutting costs as it prepares for its merger early next year with Paris-based Technip.

FMC Chief Financial Officer Maryann Mannen said the company’s surprising profitability in the third quarter was in part due to its “aggressive restructuring” efforts. The company confirmed the cuts included about 175 Houston jobs in the third quarter.

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“With headcount, we’ve been very aggressive and, as you’ve seen, we’ve got more to go,” Mannen said.

While the North American shale oil and gas business may have bottomed out in the middle of this year, the more expensive offshore sector is expected to struggle well into 2017 or beyond.

FMC’s bread and butter is equipment manufacturing and services in the subsea sector.

Within the last two years, FMC has cut close to 5,200 workers — more than 25 percent of its workforce — and now counts about 14,500 employees, 1,000 fewer than  three months ago.

FMC reported a $32 million net profit for the third quarter, which surprised many analysts who didn’t expect much of any profit. That’s less than an $82 million earned during the same time last year, but better than a $2.2 million profit in the second quarter of this year.

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FMC Chief Executive Doug Pferdehirt credited cost cutting for boosting profits. Pferdehirt, based in Houston, will become the CEO of the merged company, to be called TechnipFMC . The two energy giants agreed to a $13 billion merger of equals in May that is expected to close early next year. The merged TechnipFMC will maintain a trio of headquarters in Houston, Paris and London.

While Pferdehirt said he believes 2016 is the “trough” for the subsea sector, he warned that 2017 will see more challenging operating results as well.

He argued that more industry standardization and simplification of products and service, as well as more integrated business models and technology innovation are creating more savings that will move more offshore projects forward.

“These are not just talking points,” he said. “We are making it real today.”

Once the merger is completed,  he said, the new company will offer integrated engineering, construction and technology needs for all big offshore projects.

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