The employment picture is quite strong across the board, courtesy of the current Fed money pump manipulated boom. But not even the Fed money pumping is enough to help the oil sector.
The mining and logging industry lost 3,000 jobs in January, one of the only sectors of the U.S. economy to cut payrolls last month.
The worst is yet to come. Bricklin Dwyer, a senior U.S. economist at BNP Paribas, estimates the major oil-field servicers have announced job cuts that will total 20,000 in the first quarter of 2015, reports WSJ.
The oil industry remains a tiny part of the U.S. employment picture, Dwyer notes, at about 0.7% of total employment.
I work in the Permian basin, with a large company (~6000 employed) that directly services both the rig side and the frac side of the industry in a support role- I can tell you from the ground that there are serious pullbacks and concerns everywhere. For example, my company just laid off over 40 salespeople last week (nationwide) and has required us in management to send a performance evaluation that is tallied up to a single number in order to determine which employees are to be released at a future time and date, should the need arise.
ReplyDeleteToday I had to rate my 28 employees with a three-digit number that will very likely result in some of them being fired in the coming weeks/months.
With that said, and despite the kind-of obvious and awkward panic vibe we're seeing, I believe, from my vantage point, that what's actually happening is more opportunistic than reactionary to the market itself-- the business is trimming the bloat and unsustainable overtime that it let get out of hand during the most recent flush. Once they've pared away the excess overhead and taken a sober look at their fundamentals, they'll be better positioned to keep in the black going forward, once $70 oil returns.
It's a scary time in a lot of ways-- remember, even as a manager I'm being number-rated right now too... but it's an overdue and necessary reset in the industry- just like in the housing market over this last several years, and just like every other disequilibrium that develops in our gamed/command economic environment.