Southwestern Energy Co. (NYSE: SWN) said it would lay off 1,100 employees, or nearly 40% of its workforce, as it slows down drilling activity in response to a prolonged slump in oil prices.
Oil futures dropped to their lowest levels since 2003 this week on worries of a growing crude glut amid slowing demand due to economic weakness, especially in China.
Southwestern had no drilling rigs in operation at the start of 2016 and is yet to finalize its capital budget and operating plan for the year.
The company said on Jan. 21 it expects to record a pre-tax charge of about $60 million to $70 million related to the job cuts in the first quarter.
Southwestern also said the latest round of job cuts along with the 102 layoffs in August would lower its annual costs by $150 million to $175 million.
The company had 2,781 employees at the end of 2014.
Up to its close on Jan. 20 of $7.38, Southwestern shares had lost about 70% of their value over the past year.
Recommended Reading
What's Affecting Oil Prices This Week? (May 20, 2024)
2024-05-20 - U.S. economic activity, geopolitical uncertainty in the Middle East and the U.S.' recent hike in Chinese EV import duties all have a hand in the sway of oil prices this week.
Kissler: Mideast Tension Elevates Crude Prices—But for How Long?
2024-05-09 - Producers should be aggressive in locking in desirable crude oil prices on an abnormal market strength.
Oil Prices Up Slightly as US Crude Oil Inventories Fall
2024-07-03 - The U.S. Energy Information Administration reported a 12.2 million draw in the country's crude oil barrels in storage last week.
What's Affecting Oil Prices This Week? (May 6, 2024)
2024-05-06 - Stratas Advisors forecast that oil demand for 2024 will increase by 1.41 MMbbl/d in comparison to 2023 and that oil demand will increase by 810,000 bbl/d in comparison to 2Q23.
What's Affecting Oil Prices This Week? (July 22, 2024)
2024-07-22 - While oil traders have been adding to their net long positions in recent weeks, the rate of increase has slowed. Last week, traders of WTI increased their net long positions by only 4.25% by increasing their long positions while decreasing their short positions, while traders of Brent crude decreased their net long positions by increasing their short positions.