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.
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