No Energy Recovery In Sight: Freeport Fires 25% Of Its Oil And Gas Workers

Tyler Durden's picture

One of the more important companies reporting today was commodity king Freeport McMoRan which in 2016 has seen its stock plunge then surge on hopes the Chinese bubble reflation will push commodities higher. So far it has worked, but far more important was what FCX' own assessment of the future was: was it preparing for a strong rebound, or instead, was it slashing costs and firing employees in another confirmation that the recent rally has been, as Bank of America's "smart money" clients admit for 13 consecutive weeks, nothing but fumes. It was the latter, because in addition to reporting poor earnings numbers that were largely in line with expectations, the company also announced that it would fire 25% of its oil and gas employees, hardly a ringing endorsement for the future prospects of the energy space.

From the report:

During first-quarter 2016, FCX conducted a formal process involving multiple third-party oil and gas industry and financial participants to evaluate alternatives for the oil and gas business. Further weakening in oil and gas prices and negative credit and financing market conditions during first-quarter 2016 had a significant unfavorable impact on the process. While the process did not identify a buyer for the entire oil and gas business, a number of parties have interest in select assets, and FCX continues to engage in discussions with parties interested in potential asset or joint venture transactions.

 

In the interim, FCX is taking immediate steps to reduce oil and gas costs further. In April 2016, FCX announced a new management structure and is instituting an approximate 25 percent oil and gas workforce reduction. The newly structured oil and gas management team is actively engaged in managing costs and developing plans to preserve and enhance asset values. FCX expects to record a charge of approximately $40 million in second-quarter 2016 associated with workforce reductions and other restructuring costs.

We fully expect these newly designated "waiters and bartenders" to be touted by the US Labor Secretary as yet another confirmation of Obama's great economic recovery.

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silverer's picture

Bummer. No more wells getting tapped by these formerly highly paid workers. Just beer kegs in the basement of the tavern where they might be working next.

PT's picture

When you don't have a job to go to, you don't need any fuel to drive there.

Al Bendova's picture

How are we NOT bailing these good people out?

RadioFlyer's picture
RadioFlyer (not verified) Apr 26, 2016 7:58 AM

FCX is peddling fiction.

Dr. Engali's picture

As long as the bonuses are protected everything will be okay. All those new bartenders can get trickled on by the executives during bonus season. They'll be fine, you'll see.

Herdee's picture

The trade sanctions on Russia only served the stupid interests of a select group of NeoCons in Washington.Now you see huge production gains in Russia taking Chinese market share and ne pipelines with economic agreements in Yuan.Already Goldman Sachs is making comments that they are very worried about trading volumes coming from China in iron ore and most other commodities.Too bad Goldman no longer has control for the select moronic group in D.C.,they have competition that is massive.

firstdivision's picture

...and soon 40% of its mining workers.

NoWayJose's picture

Oil related companies have laid off tens of thousands because they think oil prices won't recover anytime soon...

Wall Street has bid up oil and oil companies because they think they will...

Hard Baloney's picture

Buy the sky and sell the sky!

Sky flyer's picture

We're on a roll now. Keep the bullish news coming right to the open.

847328_3527's picture

Obama's 'robust recovery' spreads like a cancer.

Bangin7PoundCocks's picture
Bangin7PoundCocks (not verified) Apr 26, 2016 8:32 AM

Those fellas should all become traders. Any monkey can do it and it sure does pay well.

TXSOONER's picture

We fully expect these newly designated "waiters and bartenders" to be touted by the US Labor Secretary as yet another confirmation of Obama's great economic recovery.

I couldn't agree more with that.

 

I am a Man I am Forty's picture

You can always identify a shitty company when they slash their workforce by a big chunk.  How inefficient are you currently running things when you can lay off a 1/4?

Hohum's picture

Once Gartman's dead, prosperity for all in the energy industry.

Omen IV's picture

massive layoffs and permanent reductions in highly paid workers - with no prospect for solution - except fake the stats proping up the unwary until after the election.

 

wages gone / yield gone on investments / assets to be headed south exposing liabilities that cant be paid  - capital lost / cheating - fraud - false representations everywhere /

 

Trust No One - Trust No Opinions - Trust No Facts !

Yee of little faith will inherit the earth

 

SKIDADDLE's picture

The engineered low oil price by current/former? partners in crime, U.S. and Saudi Arabia, to topple the Russian economy along with Putin has submarined one of the few sectors that provided many good paying jobs in the U.S. Our U.S. government is more concerned with their empire building efforts than in trying to right and steer the U.S.economic ship.  Our economic ship is floundering at sea and getting ready to be hit by a devastating wave created the our government and their cronies in a never-ending pursuit of power and excessive profit no matter what the costs.  The people have a right to better government and treatment than what they are getting.  This fascist, debt based system is getting ready to sink but do we hear any warnings by those who rule us?  for market analysis, http://marketscope.ca/