There’s no telling exactly how many jobs in oil field services will be affected by the crash in oil prices. Between the oil-price war created by Saudi Arabia and Russia and the downward spiral of demand created by the coronavirus, COVID-19, putting nearly the whole planet into lockdown, the oil and gas industry, particularly the shale industry is feeling the pain.
The energy industry sees increasing job loss
Within the oil and gas industry, Rystad Energy analysis says shale services will bear the brunt of job loss. Completed fracked wells are expected to drop to around 3800 by next year, and as much as 32% of the shale industry workforce is expected to be cut this year. But as with all energy industry downturns, there is a light at the bottom of the well. “Low oil prices are likely to persist in 2021 and could lead to further workforce reductions. But as we move into the second half of 2021, with better market fundamentals and a fading Covid-19, recruitment is likely to pick up in the shale sector and from 2022 will also kick-off in the offshore sector,” said Audun Martinsen, Rystad Energy’s Head of Oilfield Service Research.
Shale industry isn’t the only industry facing major job loss
While it’s good to look ahead, let’s take a closer look at where we are right now. According to Moody’s Chief Economist, Mark Zandi these are the top five at-risk industries:
- Mining, oil and gas
- Employment services
- Travel arrangements
- Leisure and hospitality
Layoffs vs. Furloughs
All five of those areas combined employ roughly 24.2 million Americans. Not all companies are planning layoffs and job cuts, however. Some are choosing to find new ways to cut costs without creating job loss. On March 23, Halliburton began furloughing 3,500 of its Houston workers for at least 60 days. Furlough will have employees working for one week and taking the next week off. Although they won’t be paid for their weeks off, they will keep all their benefits, including health insurance.
The top six urban areas at risk for job loss
The top six urban areas that are considered at-risk for job loss are:
- Midland, TX (42% of its workforce are at risk)
- Kahului, HI
- Atlantic City, NJ
- Las Vegas, NV
- Odessa, TX
- Laredo, TX
Texas has three of the top six at-risk areas. With the last major oil bust just six years ago, it is very likely that many companies will not survive this downturn. But for those who are tenacious enough to make it, Rystad Energy predicts there will be a return to 2019 levels starting in 2024.