US oil and gas exploration company Occidental Petroleum is making big changes to its top management after it reached an agreement with its activist investor Carl Icahn. In conjunction with its agreement, the Houston-based company is also enacting another round budget cuts as global oil prices continue to plummet.

After months of being at odds with its billionaire investor, Occidental Petroleum has finally agreed with Icahn's demand to place three of his associates on the company's board of directors. One of the three people that had been chosen by the billionaire was Occidental's former CEO, Steve Chazen.

Icahn initially expressed his issues with Occidental's management after the company decided to purchase its rival Anadarko Petroleum in a deal worth more than $38 billion. The billionaire investor mentioned in a statement that he was pleased that the company finally agreed to his terms and they can now focus on providing more value to all its stockholders.

As for its cost-cutting plans, Occidental revealed that it will be cutting around $2.5 billion from its capital budget for the year. The company will also be slashing around $600 million from its operating budget. This will be the company's third round of budget cuts following the continued drop in global oil prices.

The spread of the coronavirus at the start of the year and the recent collapse of the pact between Russia and Saudi Arabia have sent global oil prices to new lows. Prices have so far dropped by more than 50 percent to around $25 per barrel.

Taking into account the new round of cuts, Occidental plans to spend between $2.7 billion and $2.9 billion on its drilling operations and ongoing projects. The allocated budget will be around 47 percent less than the company's original annual budget of between $5.2 billion and $5.4 billion.

Occidental CEO Vicki Hollub mentioned in a statement that the company is making solid progress in shoring up its finances to cope with the low commodity price environment and the other economic pressures facing the industry. As part of its cost-cutting measures, the company has also implemented a company-wide pay cut, which it had outlined in a memo to employees. The memo stated that all of its employees were getting a 30 percent pay cut. Senior executives will be getting larger pay cuts, while Hollub's pay will be cut by more than 80 percent.

Occidental stated that aggressive measures were necessary to ensure the health of the company and to protect jobs. Also, the company stated that it will be suspending bonuses and putting a freeze on hiring. Employees have also been given the option of taking unpaid leaves of absence so that they can spend more time with their families during these trying times.