Linn Energy – 50+ jobs.

Newfield Exploration Co. – 150 jobs.

Pioneer Natural Resources – 70 jobs.

In the last three weeks or so, Denver has seen these three oil and gas companies announce the closing of their Denver offices.

While many of the impacted employees will be offered a position in another location and/or a severance package, the toll on those impacted, as well as the oil and gas community in general, cannot be overstated.

Pioneer's announcement yesterday included a well-intended, and no doubt heartfelt, acknowledgement from management:  "Decisions to right-size our workforce are never easy, as we know they impact good people and the communities in which they live. These employees have worked hard for Pioneer, and we place a great deal of value on their efforts. These decisions are an unfortunate reality of the price environment that we face today."

Again, as well–intended as these statements may be, or as helpful as offered relocation packages may be, they can be of little solace to those displaced employees.

And I worry about the collateral effect in Denver.  Will these displaced workers spend less, thereby impacting local businesses?  Will local community groups be impacted by reduced charitable contributions?

The significance of the oil and gas industry to the Denver economy was recently highlighted in an article in the Denver Business Journal, which noted, among other notable facts:

  • 11% of all downtown Denver private sector jobs are in the oil and gas industry;
  • The industry leases more than 5.1 million square feet of downtown office space, representing 22.6% of the total downtown private sector office space;
  • The industry generates some $30.5 million annually in lodging revenues and another $22.1 in retail spending;
  • The industry's charitable contributions in 2014 exceeded $27 million; and
  • Industry conferences generated an additional $20.8 in economic activity.

Then too are the tangible and intangible impacts on the oil and gas community.  Will we see more companies following the lead and eliminating redundant offices and leaving Denver? How will the rising numbers of unemployed industry professionals affect the job market in general, and wages in specific?  How many people will spend their days worries about their own positions – how would they break the news to their spouse or family?

These are troubled times for a resilient industry.  Let's hope the individuals impacted can be as resilient.

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