Houston Matters

How Are Oil Giants Able to Buy Other Companies Amid Layoffs?

Much has been made about the fact that the oil slump of the last year or two has had its most significant impact on those startups that got in during the boom but can’t make a go of it in today’s environment. But the big mainstay oil and gas companies have also felt the pinch […]

A fracking rig in DeWitt County, Texas. Photo: Dave Fehling, Houston Public Media.Much has been made about the fact that the oil slump of the last year or two has had its most significant impact on those startups that got in during the boom but can’t make a go of it in today’s environment.

But the big mainstay oil and gas companies have also felt the pinch — and passed that pain onto thousands and thousands of laid off workers. The most recent example: Royal Dutch Shell is cutting a quarter of its deepwater Gulf of Mexico workers — about 200 of 770 Gulf of Mexico employees and contractors. Shell plans to cut 2,200 jobs by the end of the year to make room for its acquisition of BG Group, a British gas producer, for $50 billion.

But…wait. Is Shell really hurting if it can manage to purchase a company for $50 billion? Just how badly should we feel for the Shells, Halliburtons, Schlumbergers, and ConocoPhillips of the world — all of whom have announced layoffs in recent months? Just how much are those layoffs tied to low oil prices, and how much of it is business as usual?

To find out, we ask Loren Steffy, managing director for 30 Point Strategies, a writer-at-large for Texas Monthly and a columnist for EnergyVoice.com.

(Photo: Dave Fehling, Houston Public Media)

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