In response to unprecedented market conditions and an uncertain economic outlook caused by the COVID-19 pandemic, DCP Midstream, LP has announced a 15% workforce reduction across its nine-state footprint. The company is providing severance packages, subsidised health coverage, and outplacement counselling for impacted employees.
The senior executive team also unanimously elected to reduce their base salary and variable compensation by between 15% and 10%. The reduction in force, voluntary reductions in senior executive compensation, and other internal cost savings will result in US$40 million of incremental retained cash flow. Additionally, DCP has identified US$10 million of incremental sustaining capital reductions. These actions come three weeks after the company announced a 75% growth capital reduction, a 50% distribution reduction, and over $80 million in previously identified cost and sustaining capital savings. Since early February, DCP has created a total of over US$900 million in expected retained cash flow to reduce leverage and strengthen its balance sheet.
“Despite the significant cash preservation measures we have recently taken, the external environment continues to rapidly change, resulting in the extremely difficult decision to implement workforce reductions,” said Wouter van Kempen, Chairman, President, and CEO of DCP. “We continue to prioritise safe and reliable operations, and a strong company culture, while positioning the company for long-term sustainability.”
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