Baker Hughes To Simplify Organizational Structure With Two Business Units

  • Yesterday, Baker Hughes Co BKR announced to simplify its organizational structure into two business units from four starting on October 1, a move expected to deliver at least $150 million in cost savings.
  • The company will combine its two oilfield units into an Oilfield Services & Equipment (OFSE) business led by Maria Claudia Borras.
  • It will also create an Industrial & Energy Technology (IET) unit by merging its Turbomachinery & Process Solutions (TPS) and Digital Solutions businesses. That will be headed by Rod Christie, who had overseen its TPS unit.
  • The restructuring will reduce the executive leadership team, cutting the number of direct reports to Chief Executive Lorenzo Simonelli by 25%, according to a presentation.
  • The company is targeting 20% pre-tax margins in its oilfield equipment unit by 2025, it said in the presentation.
  • Baker also said it is conducting a holistic assessment of its subsea equipment business to determine the appropriate model and will continue to rationalize products and markets that do not fit into its OFSE unit.
  • Baker is forecasting $10 billion - $11 billion in orders for the Industrial & Energy Technology unit in 2022 and 2023 and around $200 million in new energy orders for this year. 
  • Price Action: BKR shares are up 0.56% at $25.03 during the premarket session on the last check Wednesday.
  • Photo via Company
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