- Yesterday, Baker Hughes Co. BKR announced the simplification of its organizational structure into two out of four business units starting October 1, a move that is expected to generate at least $150 million in savings.
- The company will combine its two oil 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. This will be led by Rod Christie, who had overseen his TPS unit.
- The restructuring will shrink the executive management team, reducing the number of direct reports to chief executive Lorenzo Simonelli by 25%, according to a presentation.
- The company is targeting 20% pretax margins in its oilfield equipment unit by 2025, it said in the presentation.
- Baker also said he is performing a holistic assessment of his underwater equipment business to determine the appropriate model and will continue to rationalize products and markets that do not fit into his OFSE unit.
- Baker expects between $10 billion and $11 billion in orders for the Industrial & Energy Technology unit in 2022 and 2023 and about $200 million in new energy orders for this year.
- Price action: Shares of BKR rose 0.56% to $25.03 in the premarket session of the last check on Wednesday.
- Photo via company
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