Pioneer Natural Resources Co., one of the largest producers in the Permian Basin of West Texas and New Mexico, announced on May 21 that it had cut about a quarter of its workforce to save costs and boost shareholder value.
Irving, Texas-based Pioneer laid off 230 employees this week at its headquarters and in its Permian Basin offices, and cut another 300 workers in April, the company said in statement. The company expects $100 million in cost reductions “in order to remain competitive with our peers,” Pioneer said in a statement.
“Decisions like these are never easy. In this case they were necessary to both align our cost structure with our business strategy and to create value for our shareholders over the long term,” the company said in a statement.
Earlier this month, Pioneer said it was selling its Eagle Ford Shale position in South Texas to Ensign Natural Resources, a portfolio company of Warburg Pincus.
The company is now a pure-play Permian Basin producer.
Shale firms have pushed U.S. oil output to record levels. But years of heavy spending led to investor pressure to reduce spending and use the cash to provide payouts, rather than produce more oil.
Employees whose jobs were cut were to receive financial packages and job placement services, Pioneer said.
The announcement follows last month's statement by Chesapeake Energy that it was in talks to line up bankruptcy financing and was in talks for a loan to run its operations through the court proceedings.
An internal mail dated April 29, seen by Reuters, showed Centennial Resource Development plans to run just 162 of its roughly 400 wells and was on course to shut 242 if the oil market situation does not change.
While sand sales to oil and gas customers fell 1% sequentially, pricing was "significantly lower" with new mines coming online in West Texas and overcrowding the market.