Where will all the affected Checron staff go after being laid off
Chevron, the second-largest U.S. oil producer, announced on Wednesday that it plans to lay off 15 percent to 20 percent of its global workforce by the end of 2026. The move is part of the company’s strategy to reduce costs, streamline operations, and finalize its USD53 billion (around RM235 billion) acquisition of oil producer Hess.
The company has faced significant obstacles, including production setbacks, which have impacted its financial performance. Chevron is attempting to address these challenges by focusing on efficiency improvements. The acquisition of Hess, which would provide Chevron access to Guyana’s profitable oilfields, is currently in limbo due to a legal dispute with rival ExxonMobil.
Moreover, despite these difficulties, Chevron aims to leverage technology, asset sales, and a reorganization of its workforce to reduce costs by up to USD3 billion (roughly RM13.3 billion) through 2026.As of 2023, Chevron employed 40,212 people across its global operations. A 20 percent reduction in the workforce would result in approximately 8,000 job losses. This number excludes roughly 5,400 employees working at Chevron’s service stations.
Chevron’s refining business, which posted a loss in the fourth quarter, has also been affected by weak margins in gasoline and diesel production. This setback, coupled with the ongoing legal dispute over the Hess acquisition, has put additional pressure on CEO Mike Wirth.
Chevron’s stock saw a 1.3 percent decline in afternoon trading, while the broader S&P 500 Energy Sector index fell 2.4 percent. However, Chevron’s shares have risen 5.6 percent year-to-date.
Chevron has already begun offering buyouts to employees, with a deadline for opting into the program set for April or May. The company is also planning to announce a new leadership structure within the next two weeks.The oil industry, as a whole, has been consolidating, with an increasing focus on mergers and operational efficiency.
Last year, ExxonMobil acquired Pioneer Natural Resources, making it the largest producer in the Permian Basin. ExxonMobil also has the largest stake in a joint venture in Guyana, a region with more than 11 billion barrels of oil reserves. Should Chevron’s deal for Hess fall through, it would mark the second major acquisition attempt under CEO Mike Wirth that has failed.
In 2019, Chevron abandoned its bid to acquire Anadarko Petroleum after Occidental Petroleum raised its offer. Chevron’s oil and gas reserves have hit their lowest point in at least a decade, raising further concerns about its future without the Hess acquisition. To address these challenges, Chevron relocated its headquarters from San Ramon, California, to Houston in 2024 and replaced several key managers.
The company also announced the establishment of its largest tech hub outside the U.S. in India last year, further emphasizing its commitment to enhancing operational efficiency and technological advancements.
We got all this from Reuters and their full article is linked here. Thank you Reuters for the information and images.
