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MASS HALLIBURTON LAYOFFS TWO WEEKS AWAY, INTERNAL MEMO WARNS
Capgainr.com, a website run by an investment researcher, has published an internal memo they claim is circulating at Halliburton. The memo warns of another big round of layoffs and says employees will find out if they are to be let go within the next two weeks. The move is now targeting management, and specifically managers in North America. The memo says "we will 'flatten' the North America business by eliminating multiple layers of management, and we will reduce additional headcount commensurate with market activity levels."
Below is the full internal Halliburton memo the website Capgainr released:
Capgainr.com, a website run by an investment researcher, has published an internal memo they claim is circulating at Halliburton. The memo warns of another big round of layoffs and says employees will find out if they are to be let go within the next two weeks. The move is now targeting management, and specifically managers in North America. The memo says "we will 'flatten' the North America business by eliminating multiple layers of management, and we will reduce additional headcount commensurate with market activity levels."
Below is the full internal Halliburton memo the website Capgainr released:
The following was sent out minutes ago from Halliburton (HAL) to managers across verticals – I have confirmed with multiple management members at Halliburton from within my network of oil and natural gas based contacts that this is legitimate:
I am now evaluating what this means regarding Halliburton’s visibility into the Baker Hughes (BHI) acquisition as well as Halliburton’s visibility into divestitures which have been mandated by the Department of Justice to close the transaction. This development, which is on the heels of just this morning confirmed layoffs in North Dakota, calls into question the bid size that Halliburton has been receiving for the potentially divested units as well as recent speculation that Weatherford’s (WFT) recent $1 billion attempted but now cancelled raise was in fact for Halliburton’s drill bits and directional drilling platform.
Even if it eventually leaks out that Weatherford’s raise was aimed at taking down some of Halliburton’s assets/platforms the fact that Weatherford is out might be indicative that Halliburton is asking too high a price for assets that need moved. This in itself is concerning considering the precipitous fall in oil and natural gas pricing and what that might be doing and continue to do to bid/ask spreads. In addition, this might mean that Halliburton will get less in aggregate for assets that it used to model overall attractiveness of the Baker Hughes acquisition.
Further, with Weatherford gone from the bidding table this might leave General Electric (GE) as the only bidder with the ability to afford the assets. While Halliburton management has been adamant that it will do whatever it takes to close the Baker Hughes transaction this email does introduce quite a bit of uncertainty into the equation. Halliburton would face a $3.5 billion reverse termination fee (which would be paid to Baker Hughes) should it not be able to close the transaction.
My read on the internal email is that Halliburton could simply be making a defensive move as was indicated the company would make at the recent Barclays CEO Energy-Power Conference. This is certainly true. However, this doesn’t reconcile with the idea that with Baker Hughes the pro forma company would be able to potentially push out layoffs further into the current oil pricing/natural gas pricing/energy activity crisis as a result of being more efficient and at a greater economy of scale. My read is that this is most likely Halliburton being defensive in that very recently visibility into divestitures might have deteriorated. Of course, that I have not been able to confirm internally or externally of Halliburton.
Until further clarity can be provided I would advise a hold on all Halliburton initiations or additions at this time.
I am now evaluating what this means regarding Halliburton’s visibility into the Baker Hughes (BHI) acquisition as well as Halliburton’s visibility into divestitures which have been mandated by the Department of Justice to close the transaction. This development, which is on the heels of just this morning confirmed layoffs in North Dakota, calls into question the bid size that Halliburton has been receiving for the potentially divested units as well as recent speculation that Weatherford’s (WFT) recent $1 billion attempted but now cancelled raise was in fact for Halliburton’s drill bits and directional drilling platform.
Even if it eventually leaks out that Weatherford’s raise was aimed at taking down some of Halliburton’s assets/platforms the fact that Weatherford is out might be indicative that Halliburton is asking too high a price for assets that need moved. This in itself is concerning considering the precipitous fall in oil and natural gas pricing and what that might be doing and continue to do to bid/ask spreads. In addition, this might mean that Halliburton will get less in aggregate for assets that it used to model overall attractiveness of the Baker Hughes acquisition.
Further, with Weatherford gone from the bidding table this might leave General Electric (GE) as the only bidder with the ability to afford the assets. While Halliburton management has been adamant that it will do whatever it takes to close the Baker Hughes transaction this email does introduce quite a bit of uncertainty into the equation. Halliburton would face a $3.5 billion reverse termination fee (which would be paid to Baker Hughes) should it not be able to close the transaction.
My read on the internal email is that Halliburton could simply be making a defensive move as was indicated the company would make at the recent Barclays CEO Energy-Power Conference. This is certainly true. However, this doesn’t reconcile with the idea that with Baker Hughes the pro forma company would be able to potentially push out layoffs further into the current oil pricing/natural gas pricing/energy activity crisis as a result of being more efficient and at a greater economy of scale. My read is that this is most likely Halliburton being defensive in that very recently visibility into divestitures might have deteriorated. Of course, that I have not been able to confirm internally or externally of Halliburton.
Until further clarity can be provided I would advise a hold on all Halliburton initiations or additions at this time.
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