Tenaris has announced it will be adjusting its workforce at its seamless mill in Bay City, Texas, due to the sharp decline in the price of oil and subsequent decrease in market activity plus the ongoing health crisis.
The decision will result in the layoff of 200 employees at the plant.
“We have an unexpected combination of events straining US and global markets – a drastic drop in demand caused by the pandemic and an oversupply triggered by the price war between Russia and Saudi Arabia. In these stark conditions, we must rightsize our team to remain competitive and preserve our long-term commitment,” said Luca Zanotti, Tenaris US President.
Demand for oil has fallen substantially, more than 20 percent, due to restrictions and measures to contain the spread of COVID-19. With weak demand, a glut of oil and limited space to store it, the price of oil has collapsed.
Adding more pressure to a challenged tubular sector are the influx of unfairly traded OCTG imports into the U.S., where there is already a high level of pipe inventories as a result of the reduced drilling activity.
“Our mill in Bay City remains a central component to our industrial vision for the U.S. The crisis does not change our strategy but powers a sharper focus on improving all aspects of what we can control for greater impact to our operations and service to our customers,” added Zanotti.
Tenaris will also be extending healthcare coverage via COBRA for three months to employees being laid off considering the outbreak of COVID-19.