Local Economist Talks Impact Of Devon Energy Layoffs

Devon Energy, one of Oklahoma's most prominent companies, began the process of laying off 1000 employees Wednesday.  Seven hundred employees will be let go from their Oklahoma City offices, according to a statement from the company on Tuesday.

Hidden behind plastic-covered office windows, the layoffs will be happening over the next two days.

Upper level positions were cut Wednesday morning, the rest are expected to be handed down Thursday morning. Employees were told in an internal email that was leaked to News 9.

According to employees, the plastic is for privacy from outside media attention. But one employee said “it’s awful” when asked what the atmosphere was like inside Devon headquarters Wednesday morning. According to the leaked emails, employees were asked to stay near or in their offices as pink slips were being handed out.

2/17/16 Related Story: Layoffs Underway At Devon Energy Wednesday

Devon spokesperson, John Porretto, the company is downsizing because of sudden drop in the price of oil.

"The company must reduce expenses across the entire organization to maintain its financial flexibility and competitiveness," he said.

“Devon has been one company that has kind of delayed this type of action. I think they've been holding on as long as they can,” said economist Steve Agee from the Meinder School of Business at Oklahoma City University.

Economist Steve Agee added, Devon Energy was able to hold out longer than other Oklahoma energy companies because it had played it safe with cash flow and the layoffs were a sign of just how bad things have gotten.

“When you have a commodity price that drops 70 percent in like 14 months it's just a huge hit to your revenue and to your balance sheet, your income statements.”

These cuts come just weeks after major lay-offs at industry giants like Chesapeake Energy, which cut 740 employees company -wide last September, and SandRidge Energy, which laid off 740 employees and also had 229 employees cut from a subsidiary company in recent months. 

They also come the same day Halliburton announced it too has made “adjustments to its workforce” with details to be released in the coming days, according to a release. The company controls some of the nation’s largest oil fields, including some in Oklahoma. The “adjustments” took place at Halliburton’s Duncan facility.