Devon Energy to Lay Off About 300 Employees
Rising oil prices and improving profits have not been enough to prevent layoffs in Oklahoma City and throughout the oil patch.
Devon Energy this week became the latest oil and natural gas producer to announce job cuts. Devon executives said they will eliminate 300 jobs, or about nine percent of the company’s workforce, over the next few weeks.
The announcement comes six weeks after SandRidge Energy cut 80 positions, or about 20 percent of its workforce. Chesapeake Energy in January laid off about 400 employees, or about 13 percent of its workforce.
The deepest industry downturn in 30 years has caused companies to reorganize, relying heavily or even exclusively on only their best assets and significantly boosting their use of technology throughout their operations.
“…Staff reductions, together with numerous other cost-reduction measures, will remove $150 million to $200 million in general and administrative costs by 2020. The workforce reductions, which will impact all parts of the company, will occur in the weeks ahead,” a Devon Energy statement said.
Layoffs generally are expected while an industry is contracting, but the recent cuts have occurred after oil prices surged more than 50 percent over the last half of 2017 and as most energy producers have swung to profitability.
“There is less investor money flowing into our sector than at any time in my career,” Devon Chief Financial Officer Jeff Ritenour said Tuesday in an internal memo to employees. “Our industry hasn’t been an attractive investment in recent years, so investors have shifted their money elsewhere. Without a constant emphasis on improving returns and reducing costs, investors will continue to stay away.”
Tuesday’s reorganization is part of Devon’s broader 2020 vision, which executives unveiled in February. The strategy calls for the company to focus on its core fields, reduce projects and streamline assets.
Devon’s stock-focused efforts mirror similar tactics from other oil and natural gas producers. ConocoPhillips and Anadarko Petroleum were among the first oil companies to announce share buybacks this year, but several others have followed. Chevron and others have increased dividend payments.