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Layoffs Coming For Oklahoma City-Based Devon Energy

Devon Tower in downtown Oklahoma City.
Brian Hardzinski
/
KGOU
Devon Tower in downtown Oklahoma City.

Devon Energy plans to lay off workers before the end of March.

The company's CEO Dave Hager made the announcement to employees during a packed meeting Wednesday at the Cox Convention Center.

In a statement later in the afternoon, the company said the layoffs are necessary due to continued low oil and natural gas prices.

"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," the company said. "After careful consideration, it's clear that layoffs will be a necessary part of the company's near-term cost-management efforts.

Devon didn't say how many people would be affected, but that a majority of the layoffs will come by the end of the first quarter.

A document filed with the federal Securities and Exchange Commission shows Devon had over 5,000 employees at the end of 2014, and The Journal Record’s Sarah Terry-Cobo reports about 12,000 oil and gas sector workers in Oklahoma have lost their jobs since the start of the price crash 18 months ago:

A SandRidge Energy Inc. drilling subsidiary, Lariat Services Inc., cut 226 Oklahoma workers, or 87 percent of its workforce, on Jan. 13. Chesapeake Energy Corp. laid off 740 employees, or 19 percent of its national workforce, on Sept. 29. SandRidge cut 126 workers, 20 percent of its workforce, in April. Continental Resources Inc. is the only large, independent, Oklahoma City-based exploration and production company that has not announced major cutbacks. CEO and Executive Chairman Harold Hamm said he has kept his company lean since it moved to Oklahoma City from Enid in 2012. As the company expanded its production in North Dakota and in Oklahoma, it increased its employee count judiciously, he said. “We’ve made a commitment to our personnel that we’re not going to have massive layoffs,” Hamm said. “We’ve cut costs on everything across the board.”

Devon's stock dropped 8.1 percent, closing Wednesday at $21.58 per share – down $1.91 on the day’s trading. The price of oil also dropped $1.91 Wednesday, closing at $26.55, the lowest level in nearly 13 years. Tulsa-based Longbow Asset Management president Jake Dollarhide told The Oklahoman’s Adam Wilmoth it’s the worst energy downturn in three decades:

"It's not a surprise this is going to affect the weaker, highly leveraged, less diversified firms. But it's also going to affect the bluechips, the best of the energy companies like Devon. This is affecting everybody." Many energy companies are finalizing their 2016 budgets, which they are scheduled to announce over the next few weeks. "They're all hoping oil goes back to $50, but they're making contingency plans for $30," Dollarhide said. . . . "We're going to see major consolidation," he said. "We're going to see companies selling assets. We're going to continue to see layoffs. We're going to see companies do whatever they can to renegotiate their credit terms to get access to liquidity and get through this awful time in the energy industry."

KGOU is a community-supported news organization and relies on contributions from readers and listeners to fulfill its mission of public service to Oklahoma and beyond. Donate online, or by contacting our Membership department.

Brian Hardzinski is from Flower Mound, Texas and a graduate of the University of Oklahoma. He began his career at KGOU as a student intern, joining KGOU full time in 2009 as Operations and Public Service Announcement Director. He began regularly hosting Morning Edition in 2014, and became the station's first Digital News Editor in 2015-16. Brian’s work at KGOU has been honored by Public Radio News Directors Incorporated (PRNDI), the Oklahoma Association of Broadcasters, the Oklahoma Associated Press Broadcasters, and local and regional chapters of the Society of Professional Journalists. Brian enjoys competing in triathlons, distance running, playing tennis, and entertaining his rambunctious Boston Terrier, Bucky.
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