U.S. independent Southwestern Energy CompanySWN has proposed to reduce its workforce by 44% or 1,100 jobs as the price of crude slid to its lowest-ever level in more than a decade.
At the end of 2014, Southwestern Energy had 2,781 employees. Per the company, the latest round of job cuts, along with the 102 layoffs in August 2015, is likely to reduce its annual costs by $150 million to $175 million.
According to a government filing, Southwestern Energy had no drilling rigs in operation at the beginning of 2016 and the drilling activity is expected to decline further. The company has not yet decided upon its capital budget and operating plan for the year. The remaining employees will work on the company's wells, pipelines and other operations.
The oil and natural gas supply glut has resulted in a drastic fall in commodity prices. Crude prices have plunged about 38%, while natural gas costs have decreased by nearly 27% over a one-year period. This has forced several energy majors to slash thousands of jobs.
Since 2003, oil futures have fallen to their lowest levels this week. The incessant fall in the cost of the commodity stems from a growing crude glut amid slowing demand due to economic weakness, especially in China.
Southwestern Energy engages in the exploration, development and production of natural gas and crude oil in the U.S. The company operates in two segments - Exploration and Production, and Midstream Services.
Southwestern Energy has a diversified reserve base in multiple U.S. basins and focuses on investments in high-return areas such as the Fayetteville, Appalachia and New Ventures. Moreover, the company maintains a competitive cost structure, which could contribute to steady growth and returns throughout the business cycle.
Southwestern Energy currently carries a Zacks Rank #4 (Sell). Some better-ranked players from the energy sector are Contango Oil & Gas Company MCF , Braskem S.A. BAK and Enviva Partners, LP EVA . All these stocks sport a Zacks Rank #1 (Strong Buy).
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