Oklahoma City-based Devon Energy announced on Tuesday that it plans to layoff 20 percent of its staff in the first quarter of 2016. Devon, one of the largest energy companies in Oklahoma, blames the low oil price environment for the layoffs.
A company statement in January said:
"To maintain our financial flexibility while oil and natural gas prices remain weak, Devon continues to thoroughly examine all options to lower the company's cost structure."
Devon's 4th quarter earnings in 2015 showed a net loss of $4.5B due to non-cash, asset-impairment charges. The reduction in workforce is expected to save the company $400-$500 million annually.
A company statement on Tuesday said:
"Devon has begun its previously announced employee reductions and expects to complete the process at its Oklahoma City headquarters by midday Thursday. At field-level offices, the company expects to complete notifications Feb. 22. Devon has taken these and other cost-reduction actions primarily as a result of the current commodity price environment. The company must reduce expenses across the entire organization to maintain its financial flexibility and competitiveness. Devon will reduce its headcount by approximately 20 percent in the first quarter, or about 1,000 positions. Approximately 700 employees in Oklahoma City are directly impacted.There will be up to an additional 600 employees impacted by the sale of non-core upstream assets. The majority of the divestiture impact will be at the field level. In most cases, we expect these individuals will go to work for the acquiring companies."
A Devon official stated that the company employs 2,500 people in Oklahoma city. The layoffs will see 700 staff members leave before the second quarter of 2016.
Devon also announced on Tuesday the pending retirements of two top executives: Darryl Smette, EVP of marketing, facilities, pipeline & supply chain and Frank Rudolph, EVP of human resources.
Devon Energy is a leading independent energy company engaged in finding and producing oil and natural gas. Based in Oklahoma City and included in the S&P 500, Devon operates in several of the most prolific oil and natural gas plays in the U.S. and Canada with an emphasis on a balanced portfolio. The company is the second-largest oil producer among North American onshore independents.