The Houston-based energy equipment manufacturer, FMC Technologies, has slashed 1,000 jobs from its workforce as it preps to merge with Technip, a French firm.
Due to dropping revenue in U.S. shale production, FMC’s profit during the second quarter sank to $2.2 million, or 1 cent for each share. This number is a major dip from the $108 million amassed during the same period in 2015.
The company’s revenues dropped 32 percent from $1.7 billion in 2015’s second quarter down to $1.15 billion in 2016. FMC’s “surface,” onshore business recorded a $22 million loss. The subsea business posted a $97 million profit.
Chairman and CEO of FMC, John Gremp said, “As confidence improves, we anticipate spending will improve.” Gremp made note that the confidence isn’t there yet, mostly because of “further deterioration in North America.”
As of September 1, Gremp will be retired from his position, passing on his duties to Doug Pferdehirt, FMC’s current president and COO. Next year, Pferdehirt will be the CEO of the newly-merged TechnipFMC. On Thursday, Pferdehirt said about the upcoming events, “We are making big changes. Business as usual is no longer a viable option.”
Over the past two years, FMC slashed more than 20 percent of its employees, nearly 4,200 of them. The company now has a workforce of roughly 15,000, a drop of 1,000 from the number recorded three months ago. Both Gremp and Pferdehirt admitted that cuts will continue.
Just a few months ago, FMC had a little more than 3,000 employees in Houston and Technip counted 2,200 employees here. The $13 billion merger of the two companies was announced back in May. FMC is one of the largest equipment-making companies in the offshore energy division. Meanwhile, Technip’s specialty is related to energy engineering and construction.
FMC and Technip first worked together with their 2015 Forsys Subsea joint project. The future merger is projected to close at the beginning of next year. It could shrink upwards of $400 million in annual costs.
Article written by HEI contributor Briana Steptoe.