Weatherford to cut 5,000 jobs as it fights oil slump

Weatherford International plans to cut 5,000 jobs, or about 9 percent of its workforce, by the end of the first quarter as the oil services company tries to save costs amid sinking oil prices and budget cuts.

The job cuts will focus on both operating and support positions and a majority of the reductions will be in the Western Hemisphere, the company said in a statement.

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Weatherford, which currently employs about 56,000 people across the world, expects the job cuts to result in annualized savings of over $350 million.

"Due to the quickly changing market conditions, we are aligning and reducing our cost as well as organizational structures to match the new environment," the company said.

Weatherford International signage
Eddie Seal | Bloomberg | Getty Images
Weatherford International signage

Weatherford said it expects its cost actions, a reduction in capital expenditure by $550 million to $900 million in 2015 and a positive contribution from working capital balances, to offset any reduction in earnings.

Last month, the company said it would eliminate the position of chief operating officer as it copes with a 60 percent slide in global crude oil prices.

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Global oversupply and tepid demand growth have sent crude prices to five-year lows, prompting oil producers to trim their budgets.

Oil companies have responded to the lower spending levels by cutting thousands of jobs and also salaries.

Schlumberger, the world's largest oilfield services provider, is laying off 9,000 employees, while Baker Hughes is reducing its headcount by 7,000.

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Oil major BP said it last month that it would freeze base pay across the company this year, while Resolute Energy said it would slash its CEO's base pay by 96 percent.