By Tyler Durden at ZeroHedge
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.
Source: Schlumberger Fires 10,000 As It Announces A $10 Billion Stock Buyback – ZeroHedge
