Devon Energy Corp. plans to close its Houston office and consolidate US personnel into a single operations group at corporate headquarters in Oklahoma City.
An estimated 500 employees will move from Houston or be given severance packages. Transfers are expected to be “substantially complete” by the end of first-quarter 2013.
Houston employees are responsible for operations in Texas, Louisiana, Ohio, and Michigan.
Devon said consolidation will improve its ability to quickly shift the focus of its workforce among project areas “as economic conditions dictate.” The move also will improve the sharing of best practices and enhance overall operational efficiency, the company said.
Devon expects the consolidation to deliver savings of about $80 million/year from lower general and administrative expenses and reduced capitalized personnel costs.
Reorganization charges are expected to be about $125 million, with $100 million estimated to be incurred in the fourth quarter and the remainder in first-half 2013. Roughly 20% of total restructuring charges are noncash.