Baker Hughes, the world's third largest oilfield services provider behind Schlumberger and Halliburton, has said it will lay off thousands of workers in the first quarter of 2015 as the industry is entering a slow cycle.

The company which despite a significant downfall in oil prices, yesterday reported a record fourth quarter revenue of $6.6 billion, has said it needs to adapt to the new reality, where its customers, faced with oil prices volatility, will spend less on oilfield services.

Kimberly Ross, the company's CFO said: "We plan to proactively adapt to changing market conditions by rightsizing our cost structure to reflect near term activity levels. While this work is still in progress based on current estimates we expect to undertake a workforce reduction of 7000 most of which to take place in the first quarter. As a result, we expect to book a onetime charge in the range of $160 million to $185 million for severance."

Martin Craighead, Baker Hughes Chairman and CEO has warned that the upcoming months will be challenging, adding: "This industry can't simply hope and wait for oil to climb back over $100 a barrel, instead we must adapt to a new reality of sustained lower commodity prices."

Baker Hughes is not the only oilfield services provider to be reducing workforce expecting a slow cycle ahead. Schlumberger last week said it would cut 9000 jobs, while Halliburton in December 2014 revealed it would let a thousand workers go.

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