Conoco Phillips is eliminating 80 jobs in Alaska as the company tightens spending in response to the steep decline from last year's record oil prices, the company announced Wednesday.

Forty Alaska employees are being laid off with severance pay and another 40 jobs will transfer out of state, said Charlie Rowton, a spokesman at Conoco's corporate headquarters in Houston.

Conoco, the state's top oil and gas producer, has about 1,200 employees in Alaska.

Company executives held a "town hall meeting" with employees Wednesday afternoon at the Dena'ina Civic & Convention Center, across the street from Conoco's office tower in downtown Anchorage.

The meeting with Conoco's new exploration and production chief, Jim Gallogly, wasn't about the layoffs per se, but the cuts were on many people's minds, said Natalie Lowman, a Conoco spokeswoman in Anchorage.

"It's just a difficult day when you have to reduce your workforce," she said. "A very hard day."

The Alaska layoffs come as part of Conoco's plan, announced in January, to cut its global work force of 33,800 employees by 4 percent.

Conoco chief executive Jim Mulva said at the time that the company would defer or slow down some projects because of lower oil prices.

"We are positioning ourselves in the current business environment to live within our means in order to maintain financial strength," he said.

Conoco is among three oil giants, including BP and Exxon Mobil, that produce most of Alaska's oil and gas. Conoco holds a large stake in Prudhoe Bay, the nation's largest oil field, and it runs two other major North Slope oil fields, Kuparuk and Alpine. The company also owns a 28 percent stake in the trans-Alaska oil pipeline, and is a major Cook Inlet natural gas producer.

Oil companies globally have been coping with a rapid drop in oil prices, forcing many to rethink their drilling and development plans.

North Slope crude delivered to West Coast ports crested above $140 a barrel last year, then plunged to below $26 in December. It closed Wednesday at $48.38.

The Conoco spokespersons declined to say what sort of Alaska jobs the company is shedding.

The loss of oil company jobs -- positions can range from engineer to geologist to well operator -- is significant for the local economy because of the high average pay such positions command, state labor economist Neal Fried said.

The most recent data shows that jobs with the oil companies and their major contractors pay an average of more than $108,000 a year.

The 80 jobs Conoco is trimming isn't so alarming, however, when you consider history coupled with a surge in oil industry employment over the past three years, Fried said.

Alaska lost 1,400 oil jobs between 1998 and 1999, he said, when the price of oil dipped below $10 a barrel.

In recent years, growth in oil industry employment has surpassed anyone's expectations, Fried said.

Oil jobs bulled to a record 12,800 positions last year, up from 8,700 in 2005, according to state Labor Department data. The growth is remarkable given that North Slope oil production today is barely over a third of its 1988 peak of 2.1 million barrels per day, Fried said.

"Even a jaded observer like me has been amazingly impressed by the growth that we've seen in oil," he said. "I think that trend is done right now."

The Conoco cuts could presage further -- and possibly bigger -- cuts among oil field services companies, which provide much of the labor for drilling and constructing oil fields, Fried said.

Alaska's oil patch is beginning to show multiple signs of a spending squeeze.

Last week, the Italian oil company Eni told state officials it's curtailing development of its new Nikaitchuq oil field on the Slope.

Steve Rinehart of BP, which runs the huge Prudhoe Bay field, said Wednesday his company isn't planning any layoffs from its staff of nearly 2,000 employees. But the company is taking steps to tighten up.

"One of things we're doing is we're working with our contractors to bring costs down," he said, adding BP is looking to make its own operations more efficient.

A big problem facing the oil industry is that although oil prices remain relatively strong from a long-term historical standpoint, oil field costs have doubled since 2004, Rinehart said.

Lowman, the Conoco spokeswoman, said her company's layoffs mean "there's going to be a reduction in our work."

Last week, Conoco announced an $832 million budget this year for exploration, construction and other capital projects in Alaska. That compares to last year's spending of $1.4 billion, which included $506 million to lease exploration acreage in the remote Chukchi Sea, Lowman said.

Conoco plans a "significant reduction" in efforts to develop heavy oil, a sticky form of crude that's highly abundant on the Slope but difficult to get out of the ground. Heavy oil development isn't attractive in the current price environment, Lowman said.

Other capital projects will go forward, she said, including two exploratory wells in the National Petroleum Reserve-Alaska, environmental data collection in the Chukchi, and development drilling in the Kuparuk and Alpine fields as well as in Cook Inlet.