Southwestern Energy Co. announced layoffs Thursday as drilling activity stalls.
The Houston-based company will reduce its workforce by more than 40 percent, according to filings with the Securities and Exchange Commission. The oil and natural gas driller expects to shed 1,100 jobs as it copes with falling natural gas prices.
About 300 of those laid off are part of Southwestern’s Houston headquarters, according to Fuel Fix.
Employees were notified of a workforce reduction plan Thursday. Affected employees are being offered a severance package, which includes a one-time cash payment depending on length of service and, if applicable, amendments to outstanding equity awards to modify forfeiture provisions on separation from the company.
Some affected employees are being offered the opportunity to accept reduced roles with the company. The company expects the plan to be substantially implemented by the end of the first quarter this year.
Anticipated lower drilling activity led to the layoffs. At the start of the year, Southwestern had no drilling rigs in operation, but has not finalized its capital budget and operating plan for the year.
The recent news follows a smaller workforce reduction that occurred during the third quarter of 2015. Together, the reductions are expected to decrease the current costs of the company by approximately $150 to $175 million on an annual basis, exclusive of one-time termination benefits.
Shares of Southwestern Energy rose 14.2 percent to $8.43 in midday trading.
On Jan. 6, the company announced Bill Way, previously President and Chief Operating Officer, was appointed President and Chief Executive Officer. Way was also elected to the Board of Directors. He succeeded Steve Mueller as CEO.