Baker Hughes lays off 67 workers

James Fenton
The Baker Hughes building is pictured on Tuesday, Nov. 10, 2015 on Southside River Road on Farmington. cq

FARMINGTON — Baker Hughes Pressure Pumping on Southside River Road in Farmington laid off 67 workers on Tuesday citing low oil and gas prices on the commodities market.

Robert "Kevin" Jones, district manager for Baker Hughes Pressure Pumping, said in a phone interview that he learned of the layoffs Tuesday morning in a text message. Jones is on short-term disability leave for a back injury and was at home when he got the news, but was not among those who lost their jobs.

"They let go the entire frack, or stimulation, department this morning. Shut the entire department down," Jones said. "All of those guys have a lot of respect for me and I have a lot of respect for them. I started at the bottom and worked my way up, so I know these guys, known some of them for over 20 years."

The layoffs were confirmed on Tuesday by Baker Hughes spokeswoman Melanie Kania. 

After the layoffs, the oilfield service company will still employ roughly 250 workers in New Mexico, Kania said.

The company sent a WARN, or Worker Adjustment and Retraining Notification Act, letter to Farmington Mayor Tommy Roberts and to the state Department of Workforce Solutions to alert them to the layoffs.

In the Nov. 10 letter, Brian Dockey, Baker Hughes' human resources official, said that the company's decision to permanently lay off workers was a reaction to slumping oil and gas prices on the commodities market. Dockey also said the layoffs were companywide.

"As you may be aware, the North American oil and gas market is experiencing reduced exploration, drilling (and) production as a result of the declining price of oil," Dockey said. "Baker Hughes is responding rapidly to these changing market conditions and in order to meet the business needs of our customers, we are making the difficult business decision to reduce our staffing levels for some locations in the U.S."

In the letter, Dockey characterized the action as a "mass layoff."

Ten job titles were listed in the letter describing the positions held by the 67 workers.

The layoffs included 39 field operators, one assembly maintenance overhaul technician, two field service coordinators, two field engineers, nine field specialists, one operations manager, seven mechanics, two tech support engineers, three "warehouse/blend operators" and one dispatcher.

The laid off workers will be paid for a "60-day notice period" and will receive medical benefits for three months following the layoff, according to the letter.

Jones has worked for Baker Hughes since 1997 and said that he had hoped that the company could sustain staffing levels and avoid layoffs.

"This isn't a total surprise, but I had hoped we had enough work to sustain us," he said. "We've seen the market go from busy to steady to hardly nothing."

Jones said Baker Hughes Pressure Pumping's fracking department has completed 50 to 60 wells this year, about half what the company completed the year before.

Wally Drangmeister, New Mexico Oil and Gas Association spokesman, said that the news was unfortunate but not entirely a surprise, given the hit oil and gas prices have taken on the commodities market. With just two rigs drilling in the San Juan Basin, Drangmeister said the local industry is having to scale back development and find ways to cut costs in order to continue to stay afloat.

He said it is also compounded by regulations, current and proposed, that create "increased risk" for operators and oilfield companies.

"This news from Baker Hughes speaks to the challenges that we are facing in the northwest New Mexico," Drangmeister said. "With all of these proposed (Bureau of Land Management) regulations, onshore orders and a potential venting and flaring rule, it's a one-two punch of things. We're increasingly concerned. It's not unexpected but it's bad news."

James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621.