Cheap oil prices chop jobs by thousands

[Oil Wars]

Planned oil industry layoffs in the U.S. are approaching 100,000
in the past four months with more likely to come.

Oil-producing states such as North Dakota, Texas, Oklahoma and
Louisiana are catching the brunt of the cutbacks just as
consumers are enjoying cheaper gasoline prices brought on by the
55% drop in crude oil prices since last June.

"The entire Midwest from Texas to North Dakota is really feeling
the effects," says Moody's Analytics economist Aaron Smith.

About 91,000 energy-related job cuts have been made public since
early December, says Continental Resources, the Oklahoma City-
based oil producer, which has been tracking companies' layoff
announcements by the week. They came from oil exploration and
production companies, oilfield services companies and
manufacturers, such as U.S. Steel, that supply them. Some cuts
have occurred, and most are expected this year.

Oilfield services companies, including Schlumberger and Baker
Hughes, have announced about 69,000 layoffs the past four
months, Continental's count shows.

Oil and natural gas producers, including Chevron and BP, have
said they're chopping 10,000 jobs. And manufacturers, such as
those that make steel for oil pipes and storage tanks, plan
about 11,700 reductions.

Nationally, employment in mining and logging, which includes the
oil industry, is down by a seasonally adjusted 14,000 the past
two months. Moody's Analytics projects net job losses for the
mining sector — including layoffs and hiring — will total 37,000
in the second and third quarters before rising crude prices help
recoup about half that deficit by early next year.

But low oil and gasoline prices should spur more consumer
spending, a stronger economy and average monthly job growth of
270,000 this year, up from 260,000 in 2014.

Shrinking oil industry payrolls, however, are reshuffling
states' economic fortunes. New drilling techniques that siphon
crude from shale rock fueled roaring job growth in states such
as North Dakota, Texas, Oklahoma and Louisiana.

But North Dakota, which has led the boom, in February lost its
place as the state with the lowest jobless rate for the first
month since October 2008, as unemployment there rose to 2.9%
from 2.8%. Nebraska claimed the top spot with a 2.7% rate.

In North Dakota, mining employment tumbled by 600 jobs in
February alone, the Labor Department reports. There are 96
active drilling rigs in the state, down from 194 a year ago,
according to the state Department of Mineral Resources.

"We're starting to see effects ... from low oil prices," says
Michael Ziesch, labor market information manager for Job Service
North Dakota.

Yet the state's labor market is so tight, he says, that oil
companies resisted layoffs until recently, opting to hang on to
employees.

The loss of North Dakota's top ranking in unemployment is
"concerning," says Sandy McMerty, spokeswoman for the state
Commerce Department. But noting the state still has about 21,000
job openings, she adds, "There are ample openings for workers"
in fields such as health care, engineering and construction.

She says the state has been working to broaden its manufacturing
base to insulate it from oil price shocks. "We're developing new
industries," including unmanned aircraft and biotechnology.

http://www.usatoday.com/story/money/business/2015/03/31/oil-job-
cuts/70683670/