LUFKIN, TX (KTRE) - General Electric will be laying off a significant number of employees at their Buck Creek Facility indefinitely. While the number of employees affected by these cut is still unknown, an analysis of GE's fourth quarter earnings shows that the writing was on the wall.
The news of layoffs coming to GE's Lufkin plant comes just a few days after their fourth quarter earnings report showed growth and a strong final quarter for the company as a whole.
But financial advisor, Trey Wilkerson said the report shows signs that this was coming.
"Their fourth quarter results showed a significant decline in orders in the oil and gas sector," Wilkerson said. "About 10 percent decline in order was reported in the fourth quarter, and you can expect that when prices go down. Their customers cut back, quit spending as much, quit investing as much or producing as much, and therefore they cut back on the orders for companies like Lufkin Industries."
Wilkerson said the report also shows revenues for GE's oil and gas sector were down overall about six percent.
"It was kind of an early sign that things were starting to slow down in that part of the business," Wilkerson said.
And all of this can be directly associated back to the lower oil prices.
"The fourth quarter report when you just look at just the oil and gas segment really shows how they started to feel the impact of lower oil prices," Wilkerson said.
He said layoffs to the oil services sector comes as no surprise.
"During the high times, the high prices, there's a lot of hiring, a lot of jobs, and when prices go down some of the jobs go away for a while," Wilkerson said. "It will happen and as far as how much and whether there are several stages that remains to be seen."
Wilkerson said it's impossible to know at this point how much the oil services sector will be affected. It all depends on how long oil prices stay down and when they start to bounce back.
We reached out to a GE spokesperson again Tuesday and still could not get confirmation on the number of employees that will be affected