falling oil prices = layoffs?
falling oil prices = layoffs?
(OP)
I have an offer from a major EPCM company. I am concerned about the falling oil prices, and how this will effect their work. They have a lot of employees, mostly working on oil sands projects, refineries, etc.
With oil at around $70/bbl right now, with signs of declining further, it is the culture of EPC companies to begin laying off employees if projects are put on hold or cancelled. I guess this is true for almost any company if things get really rough, but the EPC atmosphere from what i've experienced in the past is dropping the axe when things get tough. What are your thoughts? Should I accept the job, it pays well but right now I am at an operating company which take care of their employees more.
With oil at around $70/bbl right now, with signs of declining further, it is the culture of EPC companies to begin laying off employees if projects are put on hold or cancelled. I guess this is true for almost any company if things get really rough, but the EPC atmosphere from what i've experienced in the past is dropping the axe when things get tough. What are your thoughts? Should I accept the job, it pays well but right now I am at an operating company which take care of their employees more.





RE: falling oil prices = layoffs?
<<A good friend will bail you out of jail, but a true friend
will be sitting beside you saying " Damn that was fun!" - Unknown>>
RE: falling oil prices = layoffs?
RE: falling oil prices = layoffs?
RE: falling oil prices = layoffs?
RE: falling oil prices = layoffs?
RE: falling oil prices = layoffs?
RE: falling oil prices = layoffs?
RE: falling oil prices = layoffs?
RE: falling oil prices = layoffs?
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If we learn from our mistakes I'm getting a great education!
RE: falling oil prices = layoffs?
Many of the EPC contractors function on the basis you've described: they staff up when they have large projects, and turf everyone except for a core staff as work dries up. Since their business model is selling man-hours, it makes little sense to keep people that they can't bill out to clients: there's nothing to pay their salaries.
So the OP's concern is well founded! The important question is when?
If you wait to be laid off, you'll be hitting the street with a lot of competition. If you jump pre-emptively, you may land somewhere you don't like and regret the decision. And you may never have needed to jump in the first place.
I'd say there's no rush. Things aren't going to dry up in a month or two: 18 months is more likely. I'd start looking for really good opportunities outside the EPC world and see what you can find. Don't be tempted to settle for something you don't find exciting based solely on fear of projects drying up. You spend too much of your life at work for it to be a drag! But also don't assume that EPCs are the only places offering exciting work!
EPCs are also not necessarily a good place to go right after school. Kids fresh out school need calibration for their commonsense that is very difficult to obtain in an office which does design only. You need some field or manufacturing work under your belt to help you understand the implications of your design decisions.
If you've moved to a boomtown, the other concern is what will happen to the value of your home, if you own one. Others have been burned big time on that score.
Best of luck to you.
RE: falling oil prices = layoffs?
RE: falling oil prices = layoffs?
Again, I have don't have any specific knowledge of the industry, so take my comments for what they are worth.
-- MechEng2005
RE: falling oil prices = layoffs?
When price goes down a lot, even if demand goes down less, there's less incentive to go balls out to sell/pump as much gas as possible.
From people in the industry I got the impression price was a big issue, but maybe I'm wrong, I'm no expert either.
KENAT,
Have you reminded yourself of FAQ731-376: Eng-Tips.com Forum Policies recently, or taken a look at http://eng-tips.com/market.cfm?
RE: falling oil prices = layoffs?
RE: falling oil prices = layoffs?
Yes, there's quite a bit of "elasticity" in the demand/supply situation for oil/gas. People can't decide not to drive to work or not to heat their homes on a minute-by-minute basis in response to the spot price of oil or gasoline or natural gas. But that doesn't mean that the demand for rapid exploitation of these unconventional reserves won't be fairly strongly tied to the selling price of oil- of COURSE the price matters as it affects the return on the (significant) capital investment involved in developing one of these projects.
And yes, the EPCs working on new, as-yet unbuilt projects will suffer sooner and (and to a greater extent) than the producers themselves, many of whom were happily profitable when oil was at $30/barrel.
RE: falling oil prices = layoffs?
As long as they have a contract, they're stable, but when the contracts get pulled, you're definately heading out the door. That goes double for the new kids on the block.
"Make everything as simple as possible, but not simpler." - Albert Einstein (1879-1955)
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RE: falling oil prices = layoffs?
-- MechEng2005
RE: falling oil prices = layoffs?
"Make everything as simple as possible, but not simpler." - Albert Einstein (1879-1955)
***************
http://virtualpipeline.spaces.live.com/
RE: falling oil prices = layoffs?
Do you want it to go up or down?
"Make everything as simple as possible, but not simpler." - Albert Einstein (1879-1955)
***************
http://virtualpipeline.spaces.live.com/
RE: falling oil prices = layoffs?
"Make everything as simple as possible, but not simpler." - Albert Einstein (1879-1955)
***************
http://virtualpipeline.spaces.live.com/
RE: falling oil prices = layoffs?
If you "heard" it on the internet, it's guilty until proven innocent. - DCS
http://www.eng-tips.com/supportus.cfm
RE: falling oil prices = layoffs?
What they didn't tell you is that for the last year, the decline of the USD against the other major currencies correlates very well to most all the important comodity price changes.
"Make everything as simple as possible, but not simpler." - Albert Einstein (1879-1955)
***************
http://virtualpipeline.spaces.live.com/
RE: falling oil prices = layoffs?
"Make everything as simple as possible, but not simpler." - Albert Einstein (1879-1955)
***************
http://virtualpipeline.spaces.live.com/
RE: falling oil prices = layoffs?
RE: falling oil prices = layoffs?
<<A good friend will bail you out of jail, but a true friend
will be sitting beside you saying " Damn that was fun!" - Unknown>>
RE: falling oil prices = layoffs?
<<A good friend will bail you out of jail, but a true friend
will be sitting beside you saying " Damn that was fun!" - Unknown>>
RE: falling oil prices = layoffs?
As others have said, though, EPC companies live and die by the billable hour, so if there are no contracts, no jobs. Investigate diligently. There are stable companies out there.