HOUSTON (Reuters) - Devon Energy Corp said on Tuesday it would lay off 300 workers, roughly 9 percent of staff, part of a plan to streamline operations and boost the shale oil producer’s sagging returns and stock price.
The cuts will affect all areas of the company’s operations, not just its Oklahoma City headquarters. Staff will be let go “in the weeks ahead,” Devon said in a statement.
Shares of Devon jumped nearly 7 percent on Tuesday to close at $33.60 on the New York Stock Exchange. The stock had been up about 5 percent earlier in the day, in line with broader markets and oil prices [O/R], but kept rising after the layoffs were announced.
Devon, like many of its shale peers, has come under pressure from Wall Street in recent months to focus less on production and more on ways to boost shareholder returns. The company’s stock had, as of Tuesday’s close, lost more than 20 percent of its value in the past year despite a jump in oil prices.
Devon said it expects the cuts to help save $150 million to $200 million by 2020.
“The company must continue to sharpen its focus on core operations, increase its operating and financial efficiencies and align its workforce with this heightened focus to be as competitive and successful as possible in this environment,” Devon spokesman John Porretto said in a statement.
Devon also laid off staff in 2016 as the oil industry grappled with oil prices nearly half of current levels.
Chief Executive Dave Hager said last month that Devon had to shed assets of more than $5 billion to become a “lean, efficient company that drives high returns.”
Devon, which operates in several large U.S. shale fields, also said last month that it would buy back $1 billion of its stock and raise its quarterly dividend by 33 percent after posting lower-than-expected quarterly earnings.
Reporting by Ernest Scheyder; editing by Jonathan Oatis
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