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Weatherford Has Made Progress But Challenges Remain

Weatherford (WFT) has fundamentally changed its priorities from growth to returns; however, execution still remains a concern. In the new oil world WFT's challenges are twofold, it not only has to adapt to low oil prices but also has to assure investors of its ability to drive operational improvement after years of disappointment. Weatherford's reserve of investor goodwill is low compared to its big 3 peers: Schlumberger (SLB), Halliburton (HAL), and Baker Hughes (BHI). Moreover, concerns about a rating downgrade constitute a large part of investor focus on WFT.

Transformation Underway But Far From Complete

Despite challenges, the company remains committed to the optimization and streamlining. Weatherford will reduce its headcount by 5,000 employees in 1Q15, saving the company $350 million in pre-tax profits. The company will reduce headcount by another 3,000 in 2Q15, bringing the total headcount reduction to 14% of the workforce. These savings are in addition to… Read More …