Why do we even need layoffs when people are leaving the company left and right on their own?
I think I hear about somebody else who leaves on their own every single day.
What's the point of hiring new people just to lay off somebody else doing the exact same job a few months later?
Layoffs at this phase in the downturn are basically a sales pitch aimed at the stock market. They are intended to say “look, we’re proactive at controlling our costs”. In fact they do very little to improve the company’s financial position, but get implemented anyway because management is afraid that if they don’t do something they’ll get ousted.
In truth the cost savings will largely be cosmetic. Long term A&G will be reduced a little, but short term costs will go up with reorganization expenses. Add to that the loss of expertise, negative impact on morale and corresponding reduction in productivity makes the net benefit negative.
Management will go through with the layoff anyway because they don’t know what else to do. Profitability is dismal. They can’t control commodity prices, don’t have assets worth enough to sell and they rationalize other expenses (wells/capex) as essential. Lacking any creativity, they fallback on staffing cuts to demonstrate to the stock holders they’re proactive. It’s a sham, but that’s the way it is.
Don’t expect this to change until commodity prices rise to a truly profitable level. That will be a challenge given the narrow margins associated with unconventionals and continually surging industry production. Until then, management will keep cycling back to staff cuts on a regular basis. It was the same in the late ‘80s and ‘90s. It’s all they know.
I mean why complain about the #1 rule of a public company. You have to provide shareholder value you twat. If you didn’t no one would invest in your company and it would not be around long. We are in the same boat as CHK. We have quite consistently missed on guidance. We are sinking. Investors would rather not mess with us because we can’t provide value. All you numnuts out there what Love in fantasy land need to wise up. This is business. Devon is not loyal to you or anyone. Devon does not care if you’ve been here 1 day or 30 years. Your a number. Your a pawn. Provide value for the shareholders or get out. Don’t need Nancy boys like you around
Easier to market to the shareholders and the market, as that is only why we are here.
“Provide shareholder value”
Worst three letter phrase in existence....well, next to “What’s that smell?!?!”