Quicksilver Resources laid off 15 percent of its employees this week as part of a “go forward operational plan” as the company prepares to go on the auction block next month.
The 30 employees were let go Wednesday after a federal bankruptcy judge in Delaware approved a severance package the day before. The employees held corporate positions and mostly worked in the downtown Fort Worth headquarters, company spokesman David Erdman said.
The reduction in force will help the company save about $3.6 million annually, court documents indicate. As part of its business plan, Quicksilver is also implementing a 20 percent salary and work-day reduction for its “nonfield” Canadian employees, according to court records.
“It’s not easy. Anytime you experience a reduction in workforce it is a difficult decision,” Erdman said. “We think it is the right thing to do for the stakeholders.”
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Erdman said the layoffs also reflect low commodity prices. He said that oil and gas prices are “not only depressed” but have been for “longer than anticipated.”
$3.6 millionThe annual savings to Quicksilver following the layoffs
It’s the second time this year that Quicksilver has let employees go. At the company’s first layoff, in February, it had about 350 employees in the U.S. and Canada. After this week’s cutbacks, it will have 250, including about 80 in Canada.
Quicksilver, which filed for Chapter 11 reorganization in March, said last month that it was going on the auction block after spending more than a year searching for someone to buy its U.S. and Canadian assets.
The sale was approved after a hearing in July in which Quicksilver was given more time to develop a restructuring plan with creditors. But the oil and gas producer said at the time that it would either reorganize or sell off some, or possibly all, of its assets.
The auction will be held Dec. 9 at the Dallas offices of Akin Gump Strauss Hauer & Feld. A hearing to approve a sale of all or a portion of the assets will be conducted in Bankruptcy Court on Dec. 14.
The Chapter 11 case did not include Quicksilver’s Canadian subsidiary after it reached a temporary agreement with creditors to avoid default on those assets. The company tried to sell its holdings in the Horn River Basin in late 2014 and early 2015, but no deal emerged to avoid a bankruptcy.
The severance plan will give employees who are crucial to the success of Quicksilver’s business plan and pending sale the confidence to remain with the company, court papers state.
On Tuesday, the bankruptcy judge approved severance payments of about $700,000, which will provide about two weeks of salary for the employees, regardless of how long they worked for the company. Quicksilver had to get the judge’s approval for the payouts since it is in bankruptcy.
Founded by the late Frank Darden, the company has long been controlled by the socially prominent Fort Worth family. Glenn Darden, his son, served as president and chief executive officer.