Oilfield services major Baker Hughes Co announced Tuesday it will simplify its organizational structure from four business units to two — a move that is expected to deliver at least $150 million in cost savings and form the baseline for further margin improvement.
Effective October 1, Baker Hughes said it will combine its two oilfield units into a Oilfield Services & Equipment business led Maria Claudia Borras, who had been executive vice president of its oilfield services business since 2017.
The Houston, Texas-based firm will also create an Industrial & Energy Technology unit by merging its Turbomachinery & Process Solutions (TPS) and Digital Solutions businesses, which will be headed by Rod Christie, who had overseen its TPS unit.
Commenting on the restructuring, Baker Hughes CEO Lorenzo Simonelli said, “Our updated structure will allow us to deliver the technologies that the energy transition will demand by further strengthening our existing customer relationships and allowing more operational flexibility, maintaining size and scale to maximize technology investments and capital returns to our shareholders.”
Baker also said it is conducting a holistic assessment of its subsea equipment business to determine the appropriate model, and that it will continue to rationalize products and markets that do not fit into in its OFSE unit.
Its Industrial Energy & Technology unit will encompass climate change related businesses such as carbon capture, hydrogen and emissions management. It is targeting 3% to 4% of revenue for its research and development budget, it said on Tuesday.
