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Occidental offering voluntary job buyouts as it cites need for spending cuts: document

FILE PHOTO: The logo of Occidental Petroleum is displayed on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 30, 2019. REUTERS/Brendan McDermid

(Reuters) – Occidental Petroleum Corp (OXY.N) is offering its employees voluntary buyouts over the next two weeks, according to a document seen by Reuters on Tuesday, citing the sharp decline in oil prices and the coronavirus pandemic for “severe dislocations” in its business.

The Houston-based company last week posted a $2 billion quarterly loss and has slashed capital spending drastically to shore up its balance sheet amid the worst oil-and-gas-industry downturn in 40 years. Occidental said that if spending cuts are not met, it will have “serious potential consequences” to the company, the document said.

Energy companies worldwide, including Exxon Mobil Corp (XOM.N) and Royal Dutch Shell PLC (RDSa.L), have slashed capital expenditures and oil output to reckon with the collapse in fuel demand due to the coronavirus pandemic.

Interested employees can submit a resignation offer to Occidental through May 26, specifying the number of months of base salary that they will accept for voluntary separation, according to the document. Employees can amend or withdraw offers unless the company has already accepted them by then, the document said. Offers not accepted will expire automatically on June 12.

Occidental declined to comment.

Occidental has been swiftly cutting expenses to deal with its debt-laden balance sheet following the collapse in oil prices. The company took on a heavy debt load in order to buy Anadarko Petroleum last year for $38 billion, a bet on continued growth of U.S. shale oil production.

It cut its 2020 capex budget on three separate occasions this year, most recently to $2.5 billion from an original plan of $5.3 billion.

Reporting by Devika Krishna Kumar in New York; Editing by Sandra Maler and Leslie Adler

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