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The approaching takeover of Concho Resources Inc. by ConocoPhillips will may lead to the layoff of nearly one-fourth of the workers at ConocoPhillips headquarters in Houston.

 

Bloomberg reports that employees will learn in February who gets the 60-day advance notice and who doesn’t. The layoffs will apparently apply only to the Houston offices and it isn’t clear whether any might occur at the Oklahoma operations in Bartlesville.

 

A ConocoPhillips spokesperson tells Bartlesville Radio:

 

"We have been transparent with employees that targeted workforce reductions in certain areas of our business may be necessary from time-to-time to align organizational capacity with expected future activity levels.

 

In light of this and in anticipation of our acquisition of Concho Resources, which is set to close in the first quarter of 2021, ConocoPhillips is taking actions to align our business to remain competitive." 

 

Conoco emerged as one of the stronger independent oil producers from this year’s pandemic-driven price crash with almost $7 billion of cash on hand at the end of the third quarter. But the company is not immune from the slump and has reduced production 22% over the past year.

 

The acquisition of Concho will make Conoco a major player in the Permian Basin, the world’s biggest shale field, and gives the company the option of growing production in the future. But so far CEO Ryan Lance has given no indication of a major ramp up. Last month he pledged to only reinvest 70% of the company’s cash flow in capital spending, indicating a conservative approach to new drilling.