In a continuing effort to cut costs, Irvine-based Smith Tool Co. plans yet another employee layoff on Sept. 19. The number of Smith workers who will lose their jobs is as yet undetermined, but the layoff will be aimed at cutting the company's production of oil drill bits by 20%, according to Jim Hauke, vice president of human resources.
Hauke said a task force composed of department heads at Smith Tool is determining which jobs to eliminate. He added that he expects the final number to be laid off will be fewer than 20% of the approximately 550 workers remaining at the oil service company, which has dismissed more than 2,300 employees over the past two years.
On Tuesday, Hauke said, a memo from Smith Tool President Doug Rock was posted on a bulletin board at Smith Tool advising workers of the upcoming layoff. Rock's memo said the action was the company's response to the persistent downturn in the oil industry and a reduction in revenues from price slashing on drill bits.
Since the first quarter of 1986, Hauke said, competition has forced Smith to reduce its drill bit prices "by as much as 30% and more" in various parts of the country. A production cut, he said, "will allow us to burn off our inventory faster and reduce costs."