Results of a survey of privately-held U.S. oil and gas companies showed most have cut work volumes by half, slashed rates for top customers and watched their gross revenues drop by more than 30% since 2014.

But the losers of today’s oil and gas downturn are the sector’s employees, according to Citadel Advisory Group, the investment banking firm that conducted the survey.

“92% of respondents have reduced their workforce, including 41% that have laid-off more than 30% of their staff,” Citadel said in a news release. “Only 25% of these company execs plan to hold current staffing levels or add employees in the next three months giving rise to more layoffs for the majority of companies.”

The story is similar for both private and public companies in the U.S. and abroad. The latest includes news April 1 of a voluntary layoff program by Petrobras, which is targeting 12,000 jobs in hopes of saving $9.2 billion by 2020, and staff reductions by Maersk Oil in Angola and the U.S.

“For those workers who are able to maintain a position, there will likely be changes to compensation for some as more than 50% or respondents said they intend to implement decreases in pay and 38% indicated that benefits would be cut to adjust to current conditions,” Citadel said.

Results also showed that:

  • Nearly 49% plan to reduce their workforce by less than 10% in the next three months;
  • More than half of the respondents said they have seen a drop in work volume of at least 41% since 2014; and
  • More than 35% are considering changes benefit programs and just as many are considering closing offices.

The survey, which polled more than 500 owners and executives of U.S. private companies, took place the first three weeks of March as rig counts sank to levels not seen since 1949 and oil prices failed to rebound high enough to repair damage brought on in part by a global oil oversupply.

Factors contributing to the downturn, according to survey participants, include:

  • Production oversupply, 78.9%;
  • OPEC policies, 65.7%;
  • Global economic slowing, 57.8%;
  • China economic slowing, 42.1%;
  • Domestic energy policies, 34.2%; and
  • Other, 2.6%.

Although news of a possible production freeze by some OPEC members and slowing U.S. crude oil output may have sparked some optimism this year, nearly 58% of those surveyed don’t expect to see the start of a recovery until 2017.

Their pessimism may have some merit.

The North American rig count continued to fall April 1. The latest Baker Hughes report tallied 499, down 20 from last year and down 629 compared to a year ago.

The U.S. rig count dropped this week by 14 rigs to 450, compared to the 1,028 rigs pumping about this time in 2015. The Canadian rig count fell by 6 to 49 this week. In 2015, the Canadian count was 100.

And although oil production has fallen in the U.S.—with U.S. Energy Information Administration data showing January production down by 56,000bbl/d to about 9.2 MMbbl/d—there has not been a surge in global demand and there has been no movement on the proposed OPEC production freeze. The issue is set to be discussed by the world’s major oil producers April 17.

Meanwhile, oil prices dropped. At about 12:35 p.m. April 1, WTI crude was $36.82/bbl, down 3.96%; while Brent was $38.62/bbl, down 4.24%.

“Most of the service and manufacturing company executives that we’ve spoken with came into 2016 with low expectations for any meaningful recovery and are planning for another down year,” said Chris Frevert, managing director of Citadel.

The survey showed that more than 61% of the oilfield service company owners have lowered their rates for top customers by more than 20%. More than 65% of the companies said their gross revenues have fallen by more than 30%.

As a service company, “the most difficult part of the downturn is not necessarily the product prices. It is the desperate ‘race to the bottom’ with my competition,” one respondent from the Rockies said in the survey report. “There are so many people out there that got into business during the boom that have no business being in business. We can all still make a profit when work is slow and oil prices are low. We cannot all make a profit if we continue to bid out work just to stay busy and not make a profit.”

Velda Addison can be reached at