ConocoPhillips to cut 4% of workforce

Energy company blames the 'current business environment' for the reduction.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Ben Rooney, CNNMoney.com staff writer

v2-cnnmoney-chart1.jpg.mkw.gif

NEW YORK (CNNMoney.com) -- ConocoPhillips said Friday that it will trim 4% of its workforce, or about 1,300 employees, and scale back spending as the energy company struggles with plunging oil prices.

"We are positioning ourselves in the current business environment to live within our means in order to maintain financial strength," said Jim Mulva, ConocoPhillips chairman and chief executive, in a statement.

Conoco also said it has approved a $12.5 billion capital spending program for 2009. That's down 18% from an estimated $15.3 billion in capital spending during 2008.

The company warned that it expects to take a $25 billion impairment charge when it releases fourth-quarter financial results on January 28. It is also taking a $7.3 billion non-cash charge related to its investment in Russian oil company Lukoil.

"With the recent substantial decline in commodity prices and worldwide equity markets, we expect to recognize several significant noncash impairments in the fourth quarter," Mulva said.

Analysts expect Conoco (COP, Fortune 500) to report earnings of $1.57 per share on revenue of $55.3 billion, according to consensus estimates. That's down from earnings of $2.48 per share and sales of $52.79 billion a year ago.

The cost-cutting moves come as the global economic recession has undermined the once robust demand for crude oil, which has put enormous pressure on the energy sector.

Crude lost more than half its value in 2008 and suffered a staggering decline of more than $100 a barrel from its peak last summer. So far this year, oil is down another 21%.

Phil Weiss, an analyst who follows Conoco for Argus Research Company, said the measures were "a bit draconian."

"They're probably battening down the hatches in the event that the environment remains this bad for a while," he added.  To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Sponsors

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.