Schlumberger's primary business is providing the equipment and tools necessary for drilling. Seen for decades as the bellwether of the oilfield services industry, its business also comprises two more industry segments. The Measurement and Systems segment supplies technology services and products to the semiconductor, banking, telecommunication, healthcare, and oil industries. With revenue growth stalling as a result of cheap oil, the entire industry is under severe pressure to consolidate. As with any industry so reliant on one commodity, supply and demand directly impact these companies' bottom lines.
Oil is alarmingly cheap and it is crippling the industry.
With little room to grow revenues, oil companies are retaliating by slashing expenses. Lay-offs have permeated the industry. Mergers are flying fast and furious as large companies desperately search for cost reducing synergies and small companies try to survive their cheap valuations. In times of trouble Darwinism takes control and only the biggest survive. Schlumberger, Halliburton and Baker Hughes all jumped onto the merger bandwagon.