Schlumberger is cutting 21,000 jobs, or around one-fifth of its total workforce, as part of structural changes in response to one of its worst quarters in decades. 

Revenue at the Houston-based oil services firm during the second quarter fell 35% to $5.4 billion compared with the same period a year ago. Its North America operations fared the worst, with revenue down nearly 60% to $1.2 billion compared with a year ago. At international operations, revenue fell 24% to $4.1 billion. 

Severance payments to workers it is letting go amounted to around $1 billion, part of $3.7 billion in impairment charges to the firm incurred in the second quarter. The firm still generated $465 million in free cash flow.

Schlumberger is making efforts to "reorganize" itself into a "leaner and more responsive company that is better aligned with our customers' workflows" it said in an earnings call this morning. That included combining 17 product lines into four divisions, streamlining its management structure, and shedding around one-fifth of its workforce.

Looking ahead to the third quarter, chief executive Oliver Le Peuch said he expects revenue to remain roughly flat, with a potential modest increase in the part of its North America business focused on "completing"oil wells (preparing them for oil extraction) that have been drilled by injecting water, sand and chemicals, a process known as fracking. 

"Oil demand is slowly starting to normalize and is expected to improve as government measures support consumption," Le Peuch said. "However, subsequent waves of potential COVID-19 resurgence pose a negative risk to this outlook."

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