Southwestern Energy Co., Houston, plans to reduce its workforce by more than 1,100 employees resulting “primarily from anticipated lower drilling activity,” the company said in a Jan. 21 filing with the US Securities and Exchange Commission.
The company, whose primary focus is natural gas development in the Fayetteville shale of Arkansas and the Marcellus shale of Pennsylvania, currently has no drilling rigs in operation, but has not finalized its capital budget and operating plan for the year.
Southwestern expects the reduction to be substantially implemented by the end of the first quarter, with a pretax charge to first-quarter earnings ranging $60-70 million.
The 2016 reduction follows a smaller reduction that occurred during third-quarter 2015, the one-time costs of which were immaterial, the company said.
Both reductions are expected to decrease the company’s current costs by $150-175 million on an annual basis, exclusive of one-time termination benefits.