Feb 17, 2016 08:47 AM EST

Devon Energy Slashes Jobs, Spending, Dividends Due To Crashing Oil Prices

Devon Energy Corp, the Oklahoma City-based energy company announced Tuesday that it reduced its dividend and capital spending by 75 percent. The company also announced that it will slash 20 percent of its staff due to the ongoing crash of oil prices.

A top independent oil producer in the United States, Devon reported that it will lay off 1,000 workers, and an additional 600 employees will be scheduled to be laid off in increments later in 2016.

This is the latest announcement from a U.S. oil company as more industry players capitulate to the onslaught of low oil prices going under $30 per barrel. These companies are forced to cut spending, reduce dividends, and produce less in order to survive.

Currently, Devon Energy Corp has reduced its dividend to just 6 cents per share for the second quarter of 2016, considerably down from its previous figure of 24 cents per share.

"We believe the decision to adjust the quarterly dividend is prudent given the current commodity price environment and the uncertain duration of this downturn," said Dave Hager, President and CEO of Devon Energy.

"This action provides us additional flexibility to balance spending with cash flow, aligns with our priority of maintaining a strong balance sheet, and moves the dividend yield and payout ratios in line with historic norms. The adjusted dividend will improve Devon's cash flow by approximately $320 million annually," he added.

Hager also stated that the oil company's first priority for 2016 is to protect the balance sheet. He said that Devon is tailoring its activities to the present market situation and is preparing itself to modify capital plans throughout 2016. It is hoped that by doing this, the company can balance capital investment with cash inflows.

Hager also added that these efforts are designed to strengthen the company's financial standing taking advantage of its top-tier assets when oil prices begin to recover.

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