Houston-based Baker Hughes is cutting employee pay for many U.S. workers by 5 percent through a new program aimed at lessening the need for additional job reductions.
The oilfield services giant is calling this latest cost-saving measure a furlough program, though the term does not appear to fit what’s being implemented because there is no indication from various media reports that the employees will be sent home without pay. Furthering the notion that this is not a furlough program, Baker Hughes confirms in an internal memo that it is giving them extra vacation days to make up for the smaller paycheck.
The pay cuts, which Baker Hughes described as temporary, will stretch from the pay period beginning Sept. 11 through the final paycheck of the year. In exchange for the pay cut, employees will get holidays on Oct. 10, Nov. 23, Dec. 23 and Dec. 28, according to an internal memo acquired by the Houston Chronicle.
The memo said the furlough program is designed to “help Baker Hughes reduce the need for additional layoffs and to achieve the cost savings needed to enable profitable growth.” Among those excluded from the pay cuts are some top executives and other global operations employees in the United States; many employees in chemicals operations; some human resources workers; many sales people; and corporate security and information technology workers, among others. Most leadership is included in the furlough, according to the memo.
Baker Hughes spokeswoman Melanie Kania said in a prepared statement, “These efforts will allow us to lessen the need for additional workforce reductions while remaining focused on serving customers and maintaining safe, compliant operations.”
It's unclear how the pay cuts will impact the local Baker Hughes workforce.
According to The Advertiser, Baker Hughes has 40 locations in Louisiana that employ 1,914 people.
Worldwide the company has 36,000 employees, down from about 62,000 when oil prices began to plummet from more than $100 a barrel in 2014 to about $45 a barrel today, the paper noted.
Read the full Fuelfix.com story here.