OKLAHOMA CITY – Between the economic slowdown from the coronavirus pandemic and the dramatic slump in the energy industry because of a supply glut, Oklahoma workers in retail stores and the energy industry are getting economically hammered.
Halliburton, the oilfield service giant formed a century ago in Oklahoma, announced last week it laid off 350 workers in Duncan. Those cuts follow nearly 800 employee layoffs in December when the company, now based in Houston, closed a command center in El Reno.
Schlumberger, a large oil field services company that has operations in nine cities in Oklahoma, announced late last month that it will institute layoffs, furloughs, and 20% pay cuts for executives and senior managers.
“In North America, Schlumberger will accelerate the restructure of its land-based operations, including reductions in personnel and instituting furlough programs, by business line and location, currently anticipated to run over the next couple of months,” the company stated.
SandRidge announced in February it would lay off more than half of its workers in Oklahoma City in April. Last Tuesday, the company indicated additional employee reductions are looming, along with a suspension of drilling activities and its remaining 2020 capital expenditures budget.
LENDERS MAY FORECLOSE ON OIL AND GAS ASSETS
In a related matter, Reuters reported late Thursday night that major U.S. lenders are poised to foreclose on operators of oil and gas fields across the country, for the first time in a generation, to avoid losses on loans to energy companies that may go bankrupt.
JP Morgan Chase & Co., Wells Fargo & Co., Bank of America Corp. and Citigroup Inc. are each in the process of setting up independent companies to own oil and gas assets, Reuters reported. The banks also plan to hire executives with relevant expertise to manage them, the news agency’s sources said.
Oil and gas exploration/ production companies are estimated to owe more than $200 billion to lenders through loans backed by oil and gas reserves. As revenue has plummeted and assets have declined in value, some companies say they may be unable to repay.
Chesapeake Energy Corp. based in Oklahoma City is among the energy firms that has hired debt advisers, Reuters reported.
HOBBY LOBBY FURLOUGHS 5,000+
Besides the turmoil in the energy industry, layoffs in Oklahoma also included Hobby Lobby, which employed more than 5,000 people in 21 stores in this state, including Lawton.
The coronavirus pandemic forced the arts and crafts giant to temporarily close its stores until further notice, the chain announced April 3.
The Green family, owners of the Oklahoma City-based company, said in a statement that they were furloughing all of their store employees and many of their corporate and distribution workers.
Hobby Lobby describes itself as the world’s largest privately owned arts-and-crafts retailer, operating more than 900 stores in 46 states with more than 43,000 employees, according to the chain’s website.
“In order to allow our furloughed employees to take full advantage of the Pandemic Unemployment Compensation and Recovery Rebates provided to eligible employees by the federal government, we are ending emergency leave pay and suspending use of company-provided paid-time-off benefits,” the company announced.
The company did say it will maintain medical, dental, life and long-term disability benefits for employees while furloughed through at least May 1, and will pay the cost of employee premiums for these benefits on behalf of employees while furloughed without pay.
“Upon return, employees will retain their original dates of hire and any accrued paid time off and vacation,” the Greens pledged.
OTHER CLOSURES AND FURLOUGHS
After announcing it was closing all of its stores in the U.S. and Canada because of the coronavirus pandemic, Bed Bath & Beyond furloughed the majority of its workers until at least May 2. The home goods retailer has stores in six Oklahoma cities, including Lawton.
The temporary cuts will affect Bed Bath & Beyond store associates as well as some of its corporate employees. The company said it would provide pay and benefits to workers until April 18 and would pay 100% of healthcare costs until further notice.
Among other chains that announced furloughs recently were Gap (which has nine stores in Oklahoma), Kohl’s (which has 11 stores in Oklahoma), and Macy’s, which announced March 30 it was closing all of its 839 department stores (including two in Oklahoma) and furloughing a majority of its 130,000 employees.
More than 15,000 chain stores could close permanently this year, according to Coresight Research. That’s approaching double the 9,548 stores that big chains announced they would shutter in 2019, a particularly brutal year for retail with the bankruptcies of Payless, Gymboree and others.
At least 600,000 mostly low-wage workers were furloughed the week of March 30 – April 3 despite President Trump’s signature on a $2 trillion stimulus package that includes billions of dollars in loans to damaged industries.