Oilfield services provider National Oilwell Varco Inc. (NYSE: NOV) announced Monday morning that the company is chopping its quarterly dividend from $0.46 to $0.05 per share. The company attributed its decision to cut the dividend to “market conditions which continued to deteriorate through the first quarter of 2016.”

Then the news gets worse. The company warned that first-quarter revenues would be down 20% sequentially. In the fourth quarter of 2015, it posted revenues of $2.72 billion, a decline of 18% sequentially and 52% year over year.

With about 376 million shares outstanding, the dividend cut should save the company more than $615 million annually.

CEO Clay Williams said:

We believe reducing the dividend is in the best interest of our company and our shareholders as we continue to work our way toward the bottom of this severe down cycle. Substantial decreases in 2016 E&P capital plans are driving activity levels to new record lows, resulting in significantly diminished demand for equipment and services. … We believe the dramatic reductions in capital spending are accelerating global production declines, setting the stage for a recovery in demand for NOV equipment and technologies. Reducing our dividend will allow us to preserve capital to invest in future growth opportunities and enhance the core capabilities our customers will need when industry activity increases.

Williams also noted that National Oilwell Varco’s total debt dropped by $500 million in the first quarter.

The company has laid off more than 1,800 workers in the past year, and layoffs continue in its Norwegian unit. Shares have dropped by nearly half in the past 12 months.

The stock traded down about 5.4% in Monday’s premarket, at $27.55 in a 52-week range of $25.74 to $56.64.

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