The consequences of low oil prices are continuing to have an impact on employees in the US’ oil and gas sector. The latest job cut report published by Challenger, Gray & Christmas, Inc., released March 31, shows that the pace of job losses in the energy sector has been considerably faster in the first quarter of 2016 compared with the first quarter of 2015.
The report noted that the number of layoffs in March 2016, at 48,207, was 21.7 percent lower than the 61,599 job cuts in February. However, compared with the previous year, 2016 job losses across all sectors have increased.
As the report notes, through the first quarter of 2016, “employers announced 184,920 job cuts, up 31.8 percent from the 140,241 cuts tracked the first three months of 2015”, while at the same time “the March figure was 31.7 percent higher than the same month a year ago (36,594), making it the fourth consecutive year-over-year increase”.
A significant amount of these job cuts come from the US’ increasingly beleaguered energy sector. According to the report: “First quarter job cuts were dominated by the energy sector, where employers announced 52,901 job cuts in the first three months of 2016.” This is a significant year-on-year gain, with the three-month total being “39.9 percent higher compared to a year ago, when fewer than 37,811 energy cuts were reported”.
These figures are in line with production decline across the US’ energy sector. Although the global oil glut started two years ago, the full effect of this on the US has come to a head in 2016.
Although a fair amount of jobs in the oil industry were shed in 2015, production remained stubborn, with 7.4 million barrels of crude produced a day in 2015 – an increase from the 6.81 million produced in 2014. However, 2016 has seen production start to take a dive, with the number of oil rigs in operation reaching the lowest numbers since 2009. This fall in production rates and rig counts has been increasingly taking its toll on employment in the sector.