Schlumberger Fires 10,000 As It Announces A $10 Billion Stock Buyback

Tyler Durden's picture

When your organic growth is over, your revenue just missed consensus expectations once again ($7.74Bn vs $7.77BN expected), your stock is trading near 4 years lows and and you are stuck in the imploding energy sector, what do you do? Why you announce a $10 billion stock buyback, but since you will have to fund it with more debt (whose cost in recent weeks has soared) you have to get rid of "overhead." How do you do that? Simple: you announce you are firing 10,000 workers.

  • SCHLUMBERGER HAS CUT 10,000 JOBS
  • SCHLUMBERGER NEW SHARE BUYBACK PROGRAM OF $10B APPROVED

The commentary:

“In anticipation of an extended activity weakness in the first half of 2016, we implemented another significant adjustment to our cost and resource base during the fourth quarter. This included a further workforce reduction of 10,000 employees, as well as greater streamlining of our overhead, infrastructure and asset base. This led us to recognize in the fourth quarter $530 million in pretax restructuring charges for expanding the incentivized leave of absence program and reducing our workforce, as well as a largely non-cash $1.6 billion pretax impairment charge for fixed assets, inventory write-downs, facility closures, contract terminations, and other asset impairments.

So sorry for the pink slips, but they were instrumental to make sure the shareholders enjoy at least a few more weeks of higher stock prices at which they can sell, ideally back to the company (and its latest bondholders):

On January 21, 2016, the Company’s Board of Directors (the Board) approved the quarterly cash dividend of $0.50 per share of outstanding common stock, beginning with the dividend payable on April 8, 2016 to stockholders of record on February 17, 2016. Additionally, in view of the fact that the Company’s current $10-billion share repurchase program that commenced in the third quarter of 2013 is about to be completed, the Board also approved a new share repurchase program of $10 billion.

Terrible news of course, but wait: here is the spin. Schlumberger's brand new "yield starved" bondholders will give the company $10 billion to create 10,000 new fast food jobs.

And that is what, as the US economy careens into recession, passes for growth. Anyone who says otherwise is peddling fiction.

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arbwhore's picture

Well positioned for the rebound... without employees.

Hitlery_4_Dictator's picture

DuPont, a company that has been around for 200 years, has been bought out. I know a guy who is retiring there, he got lucky. They are firing everyone and it's going to be broken into 3 groups and then sold off. DuPont will not be around within 3 years. This is the new America. 

tmosley's picture

Is "Schlumberger" German for "shit sandwich"?

CounterPartyVice's picture

The infinite wealth cycle ... have the CEO fires everyone, except him, take a 10 trillion dollar loan, buy back all the shares, squeeze the uncovered shorts into oblivion. 

bania's picture

I like my Slumburgers with an extra heaping of debt, hold the employees.

macholatte's picture

Slum Burger is overpriced by 2x. Reducing shares will skew EPS calcs.

 

lincolnsteffens's picture

No, "Schlumberger" is German for sleep peacefully my little ground hamburger.

OrangeJews's picture

Fuck DuPont!  Set us back thousands of years telling lies about hemp.

Hitlery_4_Dictator's picture

He told me he's sad and it's a shame. He is also an Obama supporter and thinks America is still the greatest. He's fat too.

Hitlery_4_Dictator's picture

You can fuck Dupont all you want, only its' the workers who will be fucked. Dupont will be just fine.

Sudden Debt's picture

That you can make rope from it and that it dumbs down people?

 

OrangeJews's picture

You can make almost anything out of it... OH, and the THC level is so low you can't get high.  Go play with your statist sheep friends.

Mentaliusanything's picture

The oil game is not what it cracked up to be. And they said lower oil prices will boost the economy... well in food stamps

I smell a rat running

RichardParker's picture

Hitlery,

funfundvierzig gives a very well informed (and comical) opinion about the decay of DuPont.

http://finance.yahoo.com/mbview/userview/?&u=funfundvierzig&bn=56bd37d3-...

SmokinMonkey's picture

10,000!!  Let them eat cake!

 


Ooh baby, I like it
You so excited
Don't try to hide it
I'mma make you my bitch
Cake, cake, cake, cake
Cake, cake, cake, cake
Cake, cake, cake, cake
Cake, cake, cake

JustObserving's picture

Unemployment will magically fall below 5%

PaulCraig Roberts looks at US unemployment:

Even the government’s statistical agencies have been corrupted. Inflation measures have been concocted in order to understate inflation. This lie not only saves Washington from paying Social Security cost-of-living adjustments and frees the money for more wars, but also by understating inflation, the government can create real GDP growth by counting inflation as real growth, just as the government creates 5% unemployment by not counting any discouraged workers who have looked for jobs until they can no longer afford the cost of looking and give up.  The official unemployment rate is 5%, but no one can find a job.  How can the unemployment rate be 5% when half of 25-year olds are living with relatives because they cannot afford an independent existence?  As John Williams (shadowfacts) reports, the unemployment rate that includes those Americans who have given up looking for a job because there are no jobs to be found is 23%.

BullyBearish's picture

The BLS numbers have become THE proxy for an improving economy that the fed relies on (wink wink) to justify its normalization program...if the numbers continue to be "good", plan on at least 4 increases this year...they are stairstepping this pig down, we're on the tread now and soon to be moving once again down the riser...

newdoobie's picture

In 2007/8 everyone I knew had a friend or relative who was unemployed. That is not the case today. I have some acquaintances who are on disability (giving lessons to others on how to get past the system) but very few unemployed. what gives?

Cognitive Dissonance's picture

Let's see. 10,000 jobs times $75,000 per person average wages/benefits equals $750,000,000

Looks like you're gonna need to fire a few more.

<Get to work Mr. Chairman!>

forexskin's picture

these companies are becoming economic singularities. high value, privately owned, disappearing markets, no employees. like a black hole evaporating - just wonder if the metaphorical 2nd law of thermodynamics would leave a vacuum into which new endeavors can expand, or if this miasma will salt the ground for generations...

Mr. Bystander's picture

You forgot to double that number for the cost of benefits and taxes for each employee.

buzzsaw99's picture

double it and multiply by ten or fifteen years

Mentaliusanything's picture

Please calculate the flow on to other service industries to bring on a Nose bleed

NotApplicable's picture

That oughta at least cover the loan payments, no?

Midnight Rider's picture

And if none of these guys go out and look for a job, we won't have to count them as unemployed.

WhackoWarner's picture

Hold on this will create competition for 5,000 Walmart greeter jobs, and waiters and dish washers.  Let's see how long US no longer passes up on any job that pays any money.  No need to build walls along Mexico anymore.  The unemployed US folks will now become the gardeners, lawn maintenence, fruit pickers, chicken pluckers.

 

Unions will not survive, and I think that is one goal.  Global feudalism cometh.

 

WhackoWarner's picture

Cog D;

 

The social contract is being eroded.  Elite are buying up every resource everywhere. Trying to institute cyber money control of everything.  Elite no longer see a need for masses of human hand dedicated to labour.  Robots will eliminate the need for workers/useless eaters.

Feudalism wet-dream.

ONLY problem that remains is "how to eliminate 3/4's of human life off the planet" yet still maintain a consumer debted society.  Get my drift?

lincolnsteffens's picture

Whacko... Where have you been? The Social Contract started eroding in the 1960s.There is barely a trace of it left, unless you work at gov. l

Cognitive Dissonance's picture

He meant to say..."The illusion/belief there is a social contract is being eroded."

matermaker's picture

While I do agree that the planet is way overpopulated, what you suggest can't happen, in the way that is commonly suggested.   After the Black Death occured, the Gentry found a massive labor shortage and skyrocketing wages. They were forced to even go out and plant their own fields!  There aren't a whole lot of robots doing everything under the sun, quite yet.  You would need a great culling that was both relatively fast AND non-chaotic.  You would also need all the robotic infrastructure already in place when all the humans got 86'd.   Sure some of the big tractors and combines around here that harvest wheat and soy are driven by GPS, but they are hell to work on.   I've also never come across a robot who can put hay out in a snow storm.  I've not seen a robotic fishing boat.   I've not seen any innovative music or art being made by a korean pop robot band.  Garbage trucks are yet to be driving themselves..   Japan MIGHT have invented some robotic waiters to serve at Davos, but i don't think so.  You get the point.   If these so called 'elite' planned on imploding the planet, killing off the majority of people... They best have robots in the closets of all those ghost cities in China.[This includes law enforcement] Otherwise, they would still be the tiny minority in a world without any rules.  As of right now, 'money/currency' is the most sought after and important commodity on the planet.  What you suggest would nullify that.

_ConanTheLibertarian_'s picture

Brilliant! All is well now.

Mark Mywords's picture

Fascism. It's so adorable.

Bangin7GramRocks's picture

Fuck them! I understand the cuts, but announcing $10 billion in buybacks is just a big kick in the nuts to the fired workers. Now I really hope oil goes to $15 and these pricks run out of money!

silverer's picture

Schlumberger Limited is the world's largest oilfield services company. Schlumberger employs approximately 105,000 people representing more than 140 nationalities working in more than 85 countries.

 

Bangin7GramRocks's picture

Yeah, and they can Schlumberlick my ball bag!

cornflakesdisease's picture

Not anymore.  They let go of 30,000 workers last year.

CrabbyR's picture

Well shareholders now share in the debt and the executives have given themselves a raise (stock options)

Soul Glow's picture

Well the CEO needs his golden parachute!!!!!!!

ZippyDooDah's picture

Peddle this, fictional President!

Seasmoke's picture

Whoooooosh !!!!

MASTER OF UNIVERSE's picture

It's not organic growth when 10k has to be fired to get them off the payroll so that they can create 10k fast food jobs. This is, in point of fact, arbitrage.

Jstanley011's picture

"And that is what, as the US economy careens into recession, passes for sound business practices."

Something is way, way wrong with corporate governance in this country. The boards of directors have got to be bought off.

The 10,000 job cuts were probably unavoildable given the dive in oil, but encumbering the firm with debt-funded buybacks designed to keep the stock price pumped -- it's a looting job by the executives who will walk away with bags of money no matter what happens to the company.

Bill Black wrote a book about the savings and loan crisis called The Best Way to Rob a Bank is to Own One. Today it would be called The Best Way to Loot Your Company is to be an Executive.

The whole corporate world has gone full retard. 

Mark Mywords's picture

It's just fascism - nothing personal.

Jstanley011's picture

Give them a piano wire necktie at their leaving-the-firm party, and show them how it works.

CrabbyR's picture

The 10000 jobs probably equal one executives pay.......where`s the sanity no single person can be as valuable as 10000